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EXHIBIT (h)
DECS TRUST IV
DECS* SM
(Representing Beneficial Interests in a Contract Relating to
Shares of Common Stock, $.01 par value, of Maxtor Corporation)
Underwriting Agreement
New York, New York
February , 1999
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
As Representatives of the several Underwriters,
c/o ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
DECS Trust IV, a statutory business trust organized under the Delaware
Business Trust Act, 12 Del.C. Section 3801 et seq. (the "Delaware Act"), of the
State of Delaware (such trust and the trustees thereof acting in their
capacities as such being referred to herein as the "Trust"), proposes to issue
and to sell to the several underwriters named in Schedule I hereto (the
"Underwriters"), for whom you (the "Representatives") are acting as
representatives, an aggregate of DECS representing shares of beneficial interest
in the Trust (the "Underwritten DECS"). In addition, the Underwriters will have
an option to purchase up to DECS (the "Option DECS" and, together with the
Underwritten DECS, the "DECS") to cover over-allotments, if any. The Option DECS
and the Underwritten DECS, together with the DECS of the Trust subscribed for by
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. ("▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney") pursuant to the Subscription
Agreement, dated January 21, 1999, between ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ and the Trust
(the "Subscription DECS"), are referred to herein as the "Securities." The
Securities are to be issued under an Amended and Restated Declaration of Trust,
dated as of ,
--------
* Plus an option to purchase from the Trust up to
additional DECS to cover over-allotments.
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1999 (the "Trust Agreement"), among the initial trustee and initial sponsor of
the Trust, the trustees of the Trust (the "Trustees") and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney,
as sponsor.
The Trust has entered into a forward purchase contract (the "Contract")
with Hyundai Electronics America, a corporation organized under the laws of
California ("HEA"), pursuant to which HEA has agreed to sell, and the Trust has
agreed to purchase, the number of shares of Common Stock, $.01 par value (the
"Shares"), of Maxtor Corporation (the "Company") specified therein on , 2002
(the "Exchange Date") (subject to HEA's right to deliver cash with a value
equivalent thereto, or other property, as provided in the Contract). HEA's
obligations under the Contract will be secured by a pledge of collateral under a
collateral agreement (the "Collateral Agreement") among HEA, the Trust and The
Bank of New York ("BoNY"), as collateral agent (in such capacity, the
"Collateral Agent").
In connection with the foregoing, the Company has filed with the
Commission a registration statement with respect to Shares in respect of the
Underwritten DECS, plus an additional Shares in respect of the Option DECS and
an additional Shares in respect of the Subscription DECS, for delivery by HEA
pursuant to the Securities.
To the extent there are no additional Underwriters listed on Schedule I
other than you, the term Representatives as used herein shall mean you, as
Underwriters, and the terms Representatives and Underwriters shall mean either
the singular or plural as the context requires. The use of the neuter in this
Agreement shall include the feminine and masculine wherever appropriate. Certain
terms used herein are defined in Section 23 hereof.
1. Representations and Warranties of the Trust. The Trust represents
and warrants to, and agrees with, each Underwriter as set forth below in this
Section 1.
(a) The Trust meets the requirements for use of Form N-2 under the Act
and has prepared and filed with the Commission (a) a notification on Form N-8A
(the "Notification") of registration of the Trust as an investment company under
the Investment Company Act and (b) a registration statement on Form N-2 (file
numbers 333-69325 and 811-09163), including a related preliminary prospectus,
for the registration of the offering and sale of the DECS under the Act. The
Trust may have filed one or more amendments thereto, including the related
preliminary prospectus, each of which has previously been furnished to you. The
Trust will next file with the Commission one of the following: either (1) prior
to the Trust Effective Date of such registration statement, a further amendment
to such registration statement (including the form of final prospectus); or (2)
after the Trust Effective Date of such registration statement, a final
prospectus in accordance with Rules 430A and 497(h). In the case of clause (2),
the Trust has included in such registration statement, as amended at the Trust
Effective Date, all information (other than Rule 430A Information) required by
the Act and the rules thereunder to be included in such registration statement
and the Trust Prospectus. As filed, such amendment and form of final prospectus,
or such final prospectus, shall contain all Rule 430A Information, together with
all other such required information, and, except to the extent the
Representatives shall agree in writing to a modification, shall be in all
substantive respects in the form furnished to you prior to the Execution Time
or, to the extent not completed at the Execution Time, shall contain only
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such specific additional information and other changes (beyond that contained in
the latest Preliminary Trust Prospectus) as the Trust has advised you, prior to
the Execution Time, will be included or made therein.
(b) On the Trust Effective Date, the Trust Registration Statement and
the Notification did or will, and when the Trust Prospectus is first filed (if
required) in accordance with Rule 497(h) and on the Closing Date (as defined
herein) and on any date on which Option DECS are purchased, if such date is not
the Closing Date (a "Settlement Date"), the Trust Prospectus (and any
supplements thereto) will comply in all material respects with the applicable
requirements of the Act, the Exchange Act and the Investment Company Act, and
the respective rules thereunder; on the Trust Effective Date and at the
Execution Time, the Trust Registration Statement did not or will not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein not
misleading; and, on the Trust Effective Date, the Trust Prospectus, if not filed
pursuant to Rule 497(h), did not or will not, and on the date of any filing
pursuant to Rule 497(h) and on the Closing Date and any Settlement Date, the
Trust Prospectus (together with any supplement thereto) will not, include any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
(c) No stop order suspending the effectiveness of the Trust
Registration Statement is in effect, no order preventing or suspending the use
of any Preliminary Trust Prospectus has been issued by the Commission, no notice
or order under Section 8(e) of the Investment Company Act has been issued, and
no proceedings for any such purpose are pending before or threatened by the
Commission.
(d) The Trust has been duly created, is validly existing as a business
trust under the Delaware Act, has the power and authority to own or lease, as
the case may be, and to operate its properties and conduct its business as
described in the Trust Prospectus and to enter into and perform its obligations
under this Agreement, the Trust Agreement and each of the Fundamental Documents
(as defined below) and is duly qualified to do business and is in good standing
under the laws of each jurisdiction in which it owns or leases properties or
conducts any business so as to require such qualification other than where the
failure to be so qualified would not have a material adverse effect on the Trust
or its assets. The Trust has no subsidiaries.
(e) The Trust is registered with the Commission as a non-diversified,
closed-end management investment company under the Investment Company Act and no
order of suspension or revocation of such registration has been issued or
proceedings therefor initiated or, to the knowledge of the Trust, threatened by
the Commission. No person is serving or acting as an officer or trustee of the
Trust except in accordance with the provisions of the Investment Company Act.
(f) This Agreement has been duly authorized, executed and delivered by
the Trust.
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(g) Each of the Contract, the Collateral Agreement, the Administration
Agreement between BoNY and the Trust (the "Administration Agreement"), the
Custodian Agreement between BoNY and the Trust (the "Custodian Agreement"), the
Paying Agent Agreement between BoNY and the Trust (the "Paying Agent Agreement")
and the Fund Indemnity Agreement between ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ and the Trust (the
"Fund Indemnity Agreement") (the Contract, the Collateral Agreement, the
Administration Agreement, the Custodian Agreement, the Paying Agent Agreement
and the Fund Indemnity Agreement are referred to herein, collectively, as the
"Fundamental Agreements") has been duly authorized, executed and delivered by
the Trust and, assuming due authorization, execution and delivery by the other
parties thereto, is a valid and binding agreement of the Trust, enforceable
against the Trust in accordance with its terms except as such enforceability may
be limited by applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally and by general equitable principles.
(h) The execution and delivery by the Trust of, and the performance by
the Trust of its obligations under, this Agreement and each Fundamental
Agreement (including the issue and sale by the Trust of the DECS as contemplated
by this Agreement) do not and will not, whether with or without the giving of
notice or passage of time or both, conflict with or constitute a breach or
violation of, or default under, or give the holder of any indebtedness of the
Trust the right to require the repurchase, redemption or repayment of all or a
portion of such indebtedness under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the Trust
pursuant to, any contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, lease or other agreement or instrument to which the Trust is a
party or by which it may be bound, or to which any of the property or assets of
the Trust is subject, nor will such action result in any violation of the
provisions of the Trust Agreement or any applicable law, statute, rule,
regulation, judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over the
Trust or any of its assets or properties; and no consent, approval,
authorization, order of, or qualification or filing with, any governmental body
or agency, self-regulatory organization or court or other tribunal, whether
foreign or domestic, is required for the execution and delivery by the Trust of
this Agreement or the Fundamental Agreements or the performance by the Trust of
its obligations hereunder and thereunder, except for the filing of a Certificate
of Trust and the filing of a Restated Certificate of Trust with the office of
the Secretary of State of the State of Delaware (which filings have been duly
made) and such as have been obtained and as may be required by the securities or
Blue Sky laws of the various states and foreign jurisdictions in connection with
the offer and sale of the DECS by the Underwriters.
(i) The DECS, the Trust Agreement and the Fundamental Agreements
conform in all material respects to the descriptions thereof contained in the
Trust Prospectus.
(j) The Trust Agreement and the Fundamental Agreements comply with all
applicable provisions of the Act, the Exchange Act and the Investment Company
Act, and all approvals of such documents required under the Investment Company
Act by the holders of the Securities and the Trustees have been obtained and are
in full force and effect.
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(k) On the Closing Date, as defined below in Section 5, the Fundamental
Agreements will be in full force and effect and the Trust will not be in default
thereunder and, to the knowledge of the Trust, no event will have occurred which
with the passage of time or the giving of notice or both would constitute a
default thereunder. The Trust is not currently in breach of, or in default
under, the Trust Agreement or any other written agreement or instrument to which
it or its property is bound or affected.
(l) All of the outstanding Securities have been duly authorized and are
validly issued, fully paid and nonassessable undivided beneficial interests in
the assets of the Trust, and the form of certificate used to evidence the
Securities is in due and proper form and complies with all provisions of
applicable law.
(m) The DECS have been duly authorized by the Trust for issuance to the
Underwriters pursuant to this Agreement and, when issued and delivered by the
Trust in accordance with the terms of this Agreement and the Trust Agreement
against payment of the purchase price therefor as provided herein, will be
validly issued, fully paid and nonassessable undivided beneficial interests in
the assets of the Trust, and the issuance of such DECS will not be subject to
any preemptive or similar rights. No person has rights to the registration of
any securities because of the filing of the Trust Registration Statement, and no
holder of the Securities will be subject to personal liability by reason of
being such a holder.
(n) The DECS have been approved for listing on the National Market
System of the National Association of Securities Dealers Automated Quotation
System (the "Nasdaq National Market System"), subject to official notice of
issuance. The Trust's Registration Statement on Form 8-A under the Exchange Act
is effective.
(o) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the condition,
financial or otherwise, of the Trust, or in the investment objectives,
investment policies, liabilities, business, prospects or operations of the Trust
from that set forth in the Trust Prospectus (exclusive of any supplements
thereto subsequent to the date of this Agreement) and there have been no
transactions entered into by the Trust which are material to the Trust other
than those in the ordinary course of its business or as described in the Trust
Prospectus (exclusive of any supplements thereto subsequent to the date of this
Agreement).
(p) There are no legal or governmental proceedings pending or, to the
knowledge of the Trust, threatened against or affecting the Trust that are
required to be described in the Trust Registration Statement or the Trust
Prospectus and are not so described or any statutes, regulations, contracts or
other documents that are required to be described in the Trust Registration
Statement or the Trust Prospectus or to be filed as exhibits to the Trust
Registration Statement that are not described or files as required.
(q) The Trust has all necessary consents, authorizations, approvals,
orders (including exemptive orders), certificates and permits of and from, and
has made all declarations and filings with, all governmental authorities,
self-regulatory organizations and courts and other tribunals, whether foreign or
domestic, to own and use its assets and to conduct its business in
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the manner described in the Trust Prospectus, except to the extent that the
failure to obtain or file the foregoing would not have a material adverse effect
on the Trust and except such as may be required by the securities or Blue Sky
laws of the various states in connection with the offer and sale of the DECS.
(r) There are no material restrictions, limitations or regulations with
respect to the ability of the Trust to invest its assets as described in the
Trust Prospectus, other than as described therein.
(s) The Trust has good title to all properties owned by it, in each
case, free and clear of all mortgages, pledges, liens, security interests,
claims, restrictions or encumbrances of any kind except such as (a) are
described in the Trust Prospectus or (b) do not, singly or in the aggregate,
materially affect the value of such property and do not interfere with the use
made and proposed to be made of such property by the Trust.
(t) There are no legal or governmental proceedings pending to which the
Trust is a party or of which any property of the Trust is the subject which, if
determined adversely to the Trust, would individually or in the aggregate have a
material adverse effect on the current or future financial position or results
of operations of the Trust; and, to the best of the Trust's knowledge, no such
proceedings are threatened or contemplated by governmental authorities or
threatened by others.
(u) The statement of assets, liabilities and capital included in the
Trust Registration Statement and the Trust Prospectus, together with the notes
thereto, present fairly the financial position of the Trust at the date
indicated, and such financial statement has been prepared in conformity with
generally accepted accounting principles.
(v) The accountants who certified the financial statements and
supporting schedules included in the Trust Registration Statement are
independent public accountants as required by the Act and the rules and
regulations of the Commission thereunder.
(w) The Trust has not directly or indirectly taken any action designed
to or which has constituted or which might reasonably be expected to cause or
result, under the Exchange Act or otherwise, in stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale of the
DECS or the Shares.
2. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, each Underwriter as set forth below
in this Section 2.
(a) The Company meets the requirements for use of Form S-3 under the
Act and has prepared and filed with the Commission a registration statement
(file number 333-69307) on Form S-3, including a related preliminary prospectus,
for the registration under the Act of the offering and sale of the Shares in
connection with the offering and sale of the DECS. The Company may have filed
one or more amendments thereto, including the related preliminary prospectus,
each of which has previously been furnished to you. The Company will next file
with the Commission one of the following: either (1) prior to the Company
Effective Date of
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such registration statement, a further amendment to such registration statement,
(including the final forms of such prospectus), or (2) after the Company
Effective Date of such registration statement, such final prospectus in
accordance with Rules 430A and 424(b). In the case of clause (2), the Company
has included in such registration statement, as amended at the Company Effective
Date, all information (other than Rule 430A Information) required by the Act and
the rules thereunder to be included in such registration statement and the
Company Prospectus with respect to the Shares and the offering thereof. As
filed, such amendment and form of final prospectus, or such final prospectus,
shall contain all Rule 430A Information, together with all other such required
information with respect to the Shares and the offering thereof and, except to
the extent the Representatives shall agree in writing to a modification, shall
be in all substantive respects in the form furnished to you prior to the
Execution Time or, to the extent not completed at the Execution Time, shall
contain only such specific additional information and other changes (beyond that
contained in the latest Preliminary Company Prospectus) as the Company has
advised you, prior to the Execution Time, will be included or made therein.
(b) On the Company Effective Date, the Company Registration Statement
did or will, and when the Company Prospectus is first filed (if required) in
accordance with Rule 424(b) and on the Closing Date (as defined herein) and on
any Settlement Date, the Company Prospectus (and any supplements thereto) will,
comply in all material respects with the applicable requirements of the Act and
the Exchange Act and the respective rules thereunder; on the Company Effective
Date and at the Execution Time, the Company Registration Statement did not or
will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein not misleading; and, on the Company Effective Date, the
Company Prospectus, if not filed pursuant to Rule 424(b), did not or will not,
and on the date of any filing pursuant to Rule 424(b) and on the Closing Date
and any Settlement Date, the Company Prospectus (together with any supplement
thereto) will not, include any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; provided,
however, that the Company makes no representations or warranties as to the
information contained in or omitted from the Company Registration Statement, or
the Company Prospectus (or any supplement thereto) in reliance upon and in
conformity with information furnished herein or in writing to the Company by or
on behalf of any Underwriter through the Representatives specifically for
inclusion in the Company Registration Statement or the Company Prospectus (or
any supplement thereto).
(c) No stop order suspending the effectiveness of the Company
Registration Statement is in effect, no order preventing or suspending the use
of any Preliminary Company Prospectus has been issued by the Commission, and no
proceedings for any such purpose are pending before or threatened by the
Commission. Each document incorporated by reference in the Company Registration
Statement or the Company Prospectus, when they were filed or are filed with the
Commission, conformed or will conform in all material respects to the
requirements of the Exchange Act and the rules and regulations of the Commission
thereunder, and none of such documents contained or will contain an untrue
statement of a material fact or omitted or will omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading.
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(d) Each of the Company and Maxtor Asia Pacific Limited, Maxtor Disc
Drives Pty. Limited, Maxtor Europe GmbH, Maxtor Europe Limited, Maxtor Europe
SARL, Maxtor (Japan) Limited, Maxtor Korea Limited, Maxtor Ireland Limited,
Maxtor Peripherals (S) Pte. Limited, Maxtor Receivables Corporation, Maxtor
Sales Private Limited, Maxtor (Thailand) Limited and Old SDI Sub (each a
"Subsidiary" and collectively the "Subsidiaries") has been duly incorporated and
is validly existing as a corporation in good standing under the laws of the
jurisdiction in which it is chartered or organized with full corporate power and
authority to own or lease, as the case may be, and to operate its properties and
conduct its business as described in the Company Prospectus, and is duly
qualified to do business as a foreign corporation and is in good standing under
the laws of each jurisdiction which requires such qualification except to the
extent that the failure to be so qualified or be in good standing could not
reasonably be expected to have a Material Adverse Effect (as defined herein).
(e) All the outstanding shares of capital stock of each Subsidiary have
been duly and validly authorized and issued and are fully paid and
nonassessable, and all outstanding shares of capital stock of the Subsidiaries
are owned by the Company either directly or through wholly owned Subsidiaries
free and clear of any perfected security interest or any other security
interests, claims, liens or encumbrances.
(f) The Company's authorized equity capitalization is as set forth in
the Company Prospectus; the capital stock of the Company conforms in all
material respects to the description thereof contained in the Company
Prospectus; the outstanding Shares have been duly and validly authorized and
issued and are fully paid and nonassessable; and the Shares are duly listed, and
admitted and authorized for trading on the Nasdaq National Market System; the
certificates for the Shares are in valid and sufficient form; the holders of
outstanding shares of capital stock of the Company are not entitled to
preemptive or other rights to subscribe for the Shares except for the ownership
maintenance rights granted to HEA under the stockholder agreement, dated as of
June 25, 1998 among the Company, HEA and Hyundai Electronics Industries Co.,
Ltd. (the "Stockholder Agreement"), which do not apply to the Shares subject to
the Contract; and, except as set forth in the Company Prospectus, no options,
warrants or other rights to purchase, agreements or other obligations to issue,
or rights to convert any obligations into or exchange any securities for, shares
of capital stock of or ownership interests in the Company are outstanding,
except options granted to employees in the ordinary course of business since the
end of the Company's fiscal year ended December 26, 1998.
(g) There is no franchise, contract or other document of a character
required to be described in the Company Registration Statement or Company
Prospectus, or to be filed as an exhibit thereto, which is not described or
filed as required; and the statements in the Company Prospectus under the
headings "Risk Factors--Protection of Our Intellectual Property is Limited; We
Face Risk of Third Party Claims of Infringement", "--We are the Subject of Legal
Proceedings and Claims", "Relationship Between Maxtor and Hyundai" and "Certain
Transactions" insofar as such statements summarize legal matters, agreements,
documents, or proceedings discussed therein, are accurate and fair summaries of
such legal matters, agreements, documents or proceedings.
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(h) This Agreement has been duly authorized, executed and delivered by
the Company and constitutes a valid and binding obligation of the Company,
enforceable in accordance with its terms, except (i) as the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforcement of creditors' rights generally and
by general equitable principles and (ii) to the extent that rights to indemnity
or contribution under this Agreement may be limited by Federal and state
securities laws or the public policy underlying such laws.
(i) The Company is not an "investment company" as defined in the
Investment Company Act of 1940, as amended.
(j) No consent, approval, license, authorization, order or validation
of, and no filing, recording, or registration with, any court or governmental
agency or body is required for the consummation by the Company of the
transactions contemplated herein, except such as have been obtained under the
Act and such as may be required under the blue sky laws of any jurisdiction in
connection with the purchase and distribution of the DECS by the Underwriters
and the distribution of the Shares pursuant to the terms of the DECS in the
manner contemplated herein and in the Trust Prospectus and the Company
Prospectus.
(k) Neither the performance of this Agreement by the Company, the
distribution of the Shares nor the consummation of any other of the transactions
herein contemplated nor the consummation of any other of the transactions herein
contemplated nor the fulfillment of the terms hereof will conflict with, or
result in a breach or violation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or any Subsidiaries pursuant to, (i)
the charter or by-laws of the Company or any Subsidiaries, (ii) the terms of any
material indenture, contract, lease, mortgage, deed of trust, note agreement,
loan agreement or other material agreement, obligation, condition, covenant or
instrument to which the Company or any Subsidiary is a party or bound or to
which its or their property is subject, or (iii) any statute, law, rule,
regulation, judgment, order or decree applicable to the Company or any
Subsidiary of any court, regulatory body, administrative agency, governmental
body, arbitrator or other authority having jurisdiction over the Company or any
Subsidiary or any of its or their properties.
(l) No holders of securities of the Company have rights to the
registration of such securities under the Company Registration Statement which
have not been waived in writing prior to the Execution Time.
(m) The consolidated historical financial statements and schedules of
the Company and its consolidated subsidiaries included in the Company Prospectus
and the Company Registration Statement present fairly in all material respects
the financial condition, results of operations and cash flows of the Company as
of the dates and for the periods indicated, comply as to form with the
applicable accounting requirements of the Act and have been prepared in
conformity with generally accepted accounting principles applied on a consistent
basis throughout the periods involved (except as otherwise noted therein). The
selected financial data set forth under the caption "Selected Consolidated
Financial Data" in the Company
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Prospectus and Company Registration Statement fairly present, on the basis
stated in the Company Prospectus and the Company Registration Statement, the
information included therein.
(n) No action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the Company
or any Subsidiaries or its or their property is pending or, to the knowledge of
the Company, threatened that (i) could reasonably be expected to have a material
adverse effect on the performance of this Agreement or the consummation of any
of the transactions contemplated hereby or (ii) could reasonably be expected to
have a material adverse effect on the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and the Subsidiaries,
taken as a whole, whether or not arising from transactions in the ordinary
course of business (a "Material Adverse Effect"), except as set forth in or
contemplated in the Company Prospectus (exclusive of any supplement thereto).
(o) Each of the Company and the Subsidiaries owns, leases or has
sufficient rights to use all such properties as are necessary to the conduct of
its operations as presently conducted.
(p) Neither the Company nor any Subsidiary is in violation or default
of (i) any provision of its charter or bylaws, (ii) the terms of any material
indenture, contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other material agreement, obligation, condition, covenant or
instrument to which it is a party or bound or to which its property is subject,
or (iii) any statute, law, rule, regulation, judgment, order or decree of any
court, regulatory body, administrative agency, governmental body, arbitrator or
other authority having jurisdiction over the Company or such subsidiary or any
of its properties, as applicable, the violation of which could reasonably be
expected to have a Material Adverse Effect.
(q) PricewaterhouseCoopers LLP, who have certified certain financial
statements of the Company and its consolidated subsidiaries and delivered their
report with respect to the audited consolidated financial statements and
schedules included in the Company Prospectus, and Ernst & Young LLP, who have
certified certain financial statements of the Company and its consolidated
subsidiaries and delivered their report with respect to the audited consolidated
financial statements included in the Company Prospectus, are each independent
public accountants with respect to the Company within the meaning of the Act and
the applicable published rules and regulations thereunder.
(r) There are no transfer taxes or other similar fees or charges under
Federal law or the laws of any state, or any political subdivision thereof,
required to be paid by the Company or any Subsidiary in connection with the
execution and delivery of this Agreement.
(s) The Company has filed all foreign, federal, state and local tax
returns that are required to be filed or has requested extensions thereof
(except in any case in which the failure so to file would not have a Material
Adverse Effect) and has paid all taxes required to be paid by it and any other
assessment, fine or penalty levied against it, to the extent that any of the
foregoing is due and payable, except for any such assessment, fine or penalty
that is currently
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being contested in good faith or as could not reasonably be expected to have a
Material Adverse Effect.
(t) No labor problem or dispute with the employees of the Company or
any Subsidiary exists or, to the knowledge of the Company, is threatened or
imminent, that could, in any such case, reasonably be expected to have a
Material Adverse Effect.
(u) The Company and each Subsidiary carry, or are entitled to the
benefits of, insurance (including self-insurance) in such amounts and covering
such risks as are prudent and customary in the businesses in which they are
engaged and all such insurance is, and after consummation of the transactions
contemplated herein will be, in full force and effect; and neither the Company
nor any Subsidiary has any reason to believe that it will not be able to renew
its existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that could not reasonably be expected to have a Material
Adverse Effect.
(v) No Subsidiary is currently prohibited, directly or indirectly, from
paying any dividends to the Company, from making any other distribution on such
Subsidiary's capital stock, from repaying to the Company any loans or advances
to such Subsidiary from the Company or from transferring any of such
Subsidiary's property or assets to the Company or any other Subsidiary, except
for any requirements under the laws of the jurisdictions in which any Subsidiary
is organized that corporations organized in such jurisdictions maintain
specified levels of capital or statutory reserves.
(w) The Company and the Subsidiaries possess all licenses,
certificates, permits and other authorizations issued by the appropriate
federal, state or foreign regulatory authorities necessary to conduct their
respective businesses as presently conducted except where the failure to possess
such licenses, certificates, permits or authorizations would not have a Material
Adverse Effect, and neither the Company nor any Subsidiary has received any
notice of proceedings relating to the revocation or modification of any such
license, certificate, authorization or permit which, singly or in the aggregate,
if the subject of an unfavorable decision, ruling or finding, could reasonably
be expected to have a Material Adverse Effect.
(x) The Company and each of the Subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (iii) access to
assets is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(y) The Company has not directly or indirectly taken any action
designed to or which has constituted or which might reasonably be expected to
cause or result, under the Exchange Act or otherwise, in stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Securities.
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(z) The Company and the Subsidiaries (i) are in material compliance
with any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (ii) have received and are in compliance
with all permits, licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses as presently conducted
and (iii) have not received notice of any actual or potential liability for the
investigation or remediation of any disposal or release of hazardous or toxic
substances or wastes, pollutants or contaminants, except where such
non-compliance with Environmental Laws, failure to receive required permits,
licenses or other approvals, or liability would not, individually or in the
aggregate, have a Material Adverse Effect. Neither the Company nor any
Subsidiary has been named as a "potentially responsible party" under the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended.
(aa) Each of the Company and the Subsidiaries has fulfilled its
obligations, if any, under the minimum funding standards of ▇▇▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ Employee Retirement Income Security Act of 1974 ("ERISA") and the
regulations and published interpretations thereunder with respect to each "plan"
(as defined in Section 3(3) of ERISA and such regulations and published
interpretations) in which employees of the Company or any of the Subsidiaries
are eligible to participate. Each such plan is in compliance in all material
respects with the presently applicable provisions of ERISA and such regulations
and published interpretations, except where the failure to so comply could not
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect. Neither the Company nor any of the Subsidiaries has incurred any
unpaid liability to the Pension Benefit Guaranty Corporation (other than for the
payment of premiums in the ordinary course) or to any such plan under Title IV
of ERISA.
(bb) Maxtor Peripherals (S) Pte. Limited ("Maxtor Singapore") is the
only Subsidiary that reasonably could be deemed to be a "significant subsidiary"
of the Company within the meaning of Rule 11-02(w) of Regulation S-X under the
Act.
(cc) The Company and the Subsidiaries own, possess, license or have
other rights to use, all patents, patent applications, trade and service marks,
trade and service ▇▇▇▇ registrations, trade names, copyrights, licenses,
inventions, trade secrets, technology, know-how and other intellectual property
(collectively, the "Intellectual Property") necessary for the conduct of their
respective businesses as now conducted (as described in the Company Prospectus),
except where the failure to own or possess any such Intellectual Property could
not reasonably be expected, singly or in the aggregate, to have a Material
Adverse Effect and (i) to the knowledge of the Company, there are no rights of
third parties to any such Intellectual Property other than licenses granted in
the ordinary course of business; (ii) to the knowledge of the Company, there is
no material infringement by third parties of any such Intellectual Property;
(iii) except as specifically set
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forth in the Company Prospectus, there is no pending or, to the knowledge of the
Company, threatened action, suit, proceeding or claim by others challenging the
Company's rights in or to any such Intellectual Property, and the Company is
unaware of any facts which would form a reasonable basis for any such claim;
(iv) except as specifically set forth in the Company Prospectus, there is no
pending or to the knowledge of the Company, threatened action, suit, proceeding
or claim by others challenging the validity or scope of any such Intellectual
Property, and the Company is unaware of any facts which would form a reasonable
basis for any such claim; (v) except as specifically set forth in the Company
Prospectus under the caption "Risk Factor--Protection of Our Intellectual
Property is Limited; We Face Risk of Third Party Claims of Infringement," there
is no pending or, to the knowledge of the Company, threatened action, suit,
proceeding or claim by others that the Company infringes or otherwise violates
any patent, trademark, copyright, trade secret or other proprietary rights of
others, and the Company is unaware of any other fact which would form a
reasonable basis for any such claim and (vi) to the Company's knowledge, all
U.S. patents owned by the Company are valid and enforceable.
(dd) Except as disclosed in the Company Prospectus, the Company does
not have any material lending or other relationship with any bank or lending
affiliate of any of the Underwriters.
(ee) The Company and the Subsidiaries are implementing a program, as
described in the Prospectus, to analyze and address the risk that the computer
hardware and software used by them and each supplier, vendor, customer or
financial service organizations used or serviced by them may be unable to
recognize and properly execute date-sensitive functions involving certain dates
prior to and any dates after December 31, 1999 (the "Year 2000 Problem"), and
reasonably believe that such risk will be remedied on a timely basis and will
not have a Material Adverse Effect. The Company is in substantial compliance
with the Commission's staff legal bulletin No. 5 dated January 12, 1998 related
to Year 2000 compliance.
(ff) Neither the Company nor any of the Subsidiaries has distributed
nor will it distribute prior to the latest of (i) the Closing Date, (ii) any
Settlement Date and (iii) completion of the distribution of the Securities, any
offering material in connection with the offering and sale of the Securities
other than any Preliminary Company Prospectus, the Company Prospectus, the
Company Registration Statement and other materials, if any, permitted by the
Act.
(gg) There are no outstanding loans, advances (except normal advances
for business expenses in the ordinary course of business) or guarantees of
indebtedness by the Company or any of the Subsidiaries to or for the benefit of
any of the officers or directors of the Company or any Subsidiary or any of the
members of the families of any of them, which loans, advances or guarantees are
required to be, and are not, disclosed in the Company Registration Statement and
Company Prospectus.
(hh) There have not been, and there are not proposed, any transactions
or agreements between the Company or any of the Subsidiaries on the one hand and
the officers, directors or stockholders of the Company or any of the
Subsidiaries on the other, which transactions or agreements are required to be,
and are not, disclosed in the Company Registration Statement and Company
Prospectus.
(ii) To the knowledge of the Company, no officer or director of the
Company is in breach or violation of any employment agreement,
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non-competition agreement, confidentiality agreement, or other agreement
restricting the nature or scope of employment to which such officer or director
is a party, other than such breaches or violations which could not reasonably be
expected, individually or in the aggregate, to have a Material Adverse Effect;
the conduct of the Company's business, as described in the Company Registration
Statement and Company Prospectus, will not result in a breach or violation of
any such agreement.
(jj) There are no outstanding options to acquire shares of capital
stock of the Company, except as disclosed in the Company Registration Statement
and the Company Prospectus and options granted to employees in the ordinary
course of business since the end of the Company's fiscal year ended December 26,
1998.
(kk) The Company has not received any notice or communication (in
writing or otherwise), or any other information, indicating that there is a
material possibility that any customer of the Company identified in the
"Business--Customers and Sales Channels" section of the Company Registration
Statement will cease dealing with the Company or otherwise materially reduce the
volume of business transacted by such customer with the Company below historical
levels.
Any certificate signed by any officer of the Company and delivered to
the Representatives or counsel for the Underwriters in connection with the
offering of the DECS shall be deemed a representation and warranty by the
Company (and not of such officer in his individual capacity) as to matters
covered thereby, to each Underwriter.
3. Representations and Warranties of HEA. HEA represents and warrants
to, and agrees with, each Underwriter, the Company and the Trust that:
(a) HEA has been duly organized, is validly existing as a corporation
in good standing under the laws of the State of California, with full power and
authority to own its property.
(b) HEA has full legal right, capacity, power and authority to enter
into and perform its obligations under this Agreement, the Contract and
Collateral Agreement and the letter agreement between HEA and ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ relating to expenses of the Trust (the "Reimbursement Agreement").
(c) This Agreement has been duly authorized, executed and delivered by
HEA. The Contract, the Collateral Agreement and the Reimbursement Agreement have
been duly authorized, executed and delivered by HEA and, assuming due
authorization, execution and delivery by the other parties thereto, are valid
and binding agreements of HEA, enforceable against it in accordance with their
terms.
(d) The execution and delivery by HEA of this Agreement, the Contract
and Collateral Agreement and the Reimbursement Agreement, the performance by HEA
of its obligations hereunder and thereunder and the consummation of the
transactions herein and therein contemplated do not and will not, whether with
or without the giving of notice or passage of time or both, conflict with,
result in a breach or violation of or imposition of any lien (other
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than pursuant to the Collateral Agreement), charge or encumbrance upon any
property or assets of HEA or its subsidiaries pursuant to (i) the charters or
by-laws of HEA or its subsidiaries, (ii) the terms of any indenture, contract,
lease, mortgage, deed of trust, note agreement, loan agreement or other
agreement, obligation, condition, covenant or instrument to which HEA or its
subsidiaries is a party or bound or to which its or their property is subject,
or (iii) any statute, law, rule, regulation, judgment, order or decree
applicable to HEA or its subsidiaries of any court, regulatory body,
administrative agency, governmental body, arbitrator or other authority having
jurisdiction over HEA or its subsidiaries or any of its or their properties.
Amounts received by HEA under the Contract at the Closing Date and, if any
Option DECS are purchased, at the time of delivery thereof pursuant to Section
4(b), will not be used by HEA for the purpose, whether immediate, incidental or
ultimate, of buying or carrying a margin stock, as such terms are defined in
Regulation G promulgated by the Board of Governors of the Federal Reserve
System.
(e) HEA is not and, after giving effect to the transactions
contemplated in the Contract and the Collateral Agreement and the offering and
sale of the DECS contemplated by this Agreement, will not be an "investment
company" or an entity "controlled" by an "investment company" as such terms are
defined in the Investment Company Act.
(f) HEA is the sole registered owner of and has, and on the Closing
Date (and, if any Option DECS are purchased, at the time of delivery thereof
pursuant to Section 4(b)) will have, good and valid title to the Shares to be
pledged and assigned by it under the Collateral Agreement, free and clear of any
security interests, claims, liens, equities and other encumbrances, except for
those created pursuant to the Collateral Agreement or those which otherwise have
been waived; and HEA has the full right, power and authority, and all
authorization and approval required by law to pledge and assign the Shares to be
pledged and assigned by HEA pursuant to the Collateral Agreement.
(g) Title to any Shares to be delivered by HEA pursuant to the Contract
on the Exchange Date, assuming payment of the consideration due pursuant to the
Contract on the Closing Date, will pass to the Trust free and clear of any
security interests, claims, liens, equities and other encumbrances. The sale,
transfer and delivery of any Shares to be delivered by HEA pursuant to the
Contract is not, and at the time of delivery of such Shares will not be, subject
to any right of first refusal or similar rights of any person pursuant to any
contract to which HEA or any shareholder of HEA is a party or by which any of
them is bound.
(h) HEA hereby repeats and confirms as if set forth in full herein each
of the representations, warranties, guarantees and agreements made by it in the
Contract and the Collateral Agreement and agrees that the representations,
warranties, guarantees and agreements therein and herein are made hereby for the
benefit of, and may be relied upon by, (i) the Underwriters and Cleary,
Gottlieb, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel to the Underwriters and (ii) the Company and
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ & Freidenrich LLP, counsel to the Company.
(i) HEA has not directly or indirectly taken any action which is
designed to or which has constituted or which might reasonably be expected to
cause or result, under the
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Exchange Act or otherwise, in stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Shares or the
DECS.
(j) HEA is familiar with the Company Registration Statement and the
Company Prospectus and verifies that the information set forth therein
respecting it is a fair and accurate summary of HEA's relationships and material
transactions with the Company and HEA's participation in the offering made under
the Company Registration Statement.
(k) No consent, approval, license, authorization, order or validation
of, and no filing, recording, or registration with, any court or governmental
authority, agency or body is required for the compliance by HEA with all of the
provisions of this Agreement, the Contract, the Collateral Agreement and the
Reimbursement Agreement, except such as have been obtained under the Act and
such as may be required under the blue sky laws in connection with the purchase
and distribution of the DECS by the Underwriters and the distribution of the
Shares pursuant to the terms of the DECS in the manner contemplated herein and
in the Trust Prospectus and the Company Prospectus.
Any certificate signed by HEA or any director or officer thereof, as
the case may be, and delivered to the Representatives or counsel for the
Underwriters in connection with the offering of the DECS shall be deemed a
representation and warranty by HEA (and not of such officer in his individual
capacity), as to matters covered thereby, to each Underwriter.
4. Purchase and Sale.
(a) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Trust agrees to sell to
each Underwriter, and each Underwriter agrees, severally and not jointly, to
purchase from the Trust, at a purchase price of $ per DECS, the amount of the
Underwritten DECS set forth opposite such Underwriter's name in Schedule I
hereto.
(b) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Trust hereby grants an
option to the several Underwriters to purchase, severally and not jointly, up to
Option DECS at the same purchase price per DECS as the Underwriters shall pay
for the Underwritten DECS. The option may be exercised only to cover
over-allotments in the sale of the Underwritten DECS by the Underwriters. The
option may be exercised in whole or in part at any time (but not more than once)
on or before the 30th day after the date of the Trust Prospectus upon written or
facsimile notice by the Representatives to the Trust setting forth the number of
Option DECS as to which the several Underwriters are exercising the option and
the Settlement Date. Delivery of certificates for the Option DECS by the Trust,
and payment therefor to the Trust, shall be made as provided in Section 5
hereof. The number of shares of the Option DECS to be purchased by each
Underwriter shall be the same percentage of the total number of Option DECS to
be purchased by the several Underwriters as such Underwriter is purchasing of
the Underwritten DECS, subject to such adjustments as you in your absolute
discretion shall make to eliminate any fractional DECS.
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(c) As compensation to the Underwriters for their commitment hereunder,
and in view of the fact that the proceeds of the sale of the DECS will be used
by the Trust as specified in the Contract, HEA agrees to pay to ▇▇▇▇▇▇▇ ▇▇▇▇▇
Barney, at the time of each delivery of DECS pursuant to Section 5, an amount
equal to $ per DECS being delivered at such time, plus $ per DECS for each
Subscription DECS owned by ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ after giving effect to the
subdivision of the Subscription DECS provided for in the Subscription Agreement.
5. Delivery and Payment. Delivery of and payment for the Underwritten
DECS and the Option DECS (if the option provided for in Section 4(b) hereof
shall have been exercised on or before the first Business Day prior to the
Closing Date) shall be made at 10:00 A.M., New York City time, on , 1999, or at
such time on such later date not later than five Business Days after the
foregoing date as the Representatives shall designate, which date and time may
be postponed by agreement among the Representatives, the Trust and HEA or as
provided in Section 13 hereof (such date and time of delivery and payment for
the DECS being herein called the "Closing Date"). Delivery of the DECS shall be
made to the Representatives for the respective accounts of the several
Underwriters against payment by the several Underwriters through the
Representatives of the purchase price thereof to or upon the order of the Trust
by wire transfer payable in immediately available same-day funds to an account
specified by the Trust in writing at least two Business Days in advance of the
Closing Date. Delivery of the DECS shall be made through the facilities of the
Depository Trust Company unless the Representatives shall otherwise instruct.
The Trust agrees to have the DECS available for inspection and checking
by the Representatives in New York, New York, not later than 1:00 P.M. on the
Business Day prior to the Closing Date.
If the option provided for in Section 4(b) hereof is exercised after
the first Business Day prior to the Closing Date, the Trust will deliver the
Option DECS (at the expense of the Trust) to the Representatives on the date
specified by the Representatives (which shall be within three Business Days
after exercise of said option) for the respective accounts of the several
Underwriters, against payment by the several Underwriters through the
Representatives of the purchase price thereof to or upon the order of the Trust
by wire transfer payable in immediately available same-day funds to an account
specified by the Trust in writing at least two Business Days in advance of such
Settlement Date. If settlement for the Option DECS occurs after the Closing
Date, the Trust, the Company and HEA will deliver to the Representatives on the
Settlement Date for the Option DECS, and the obligation of the Underwriters to
purchase the Option DECS shall be conditioned upon receipt of, supplemental
opinions, certificates and letters confirming as of such date the opinions,
certificates and letters delivered on the Closing Date pursuant to Section 10
hereof.
6. Offering by the Underwriters. It is understood that the several
Underwriters propose to offer the DECS for sale to the public as set forth in
the Trust Prospectus.
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7. Agreements of the Trust. The Trust agrees with the several
Underwriters that:
(a) The Trust will use its best efforts to cause the Trust
Registration Statement, if not effective at the Execution Time, and any
amendment thereof, to become effective. Prior to the termination of the
offering of the DECS, the Trust will not file any amendment of the
Trust Registration Statement or supplement to the Trust Prospectus or
any Rule 462(b) Trust Registration Statement unless the Trust has
furnished you a copy for your review prior to filing and will not file
any such proposed amendment or supplement to which you object. Subject
to the foregoing sentence, if the Trust Registration Statement has
become or becomes effective pursuant to Rule 430A, or filing of the
Trust Prospectus is otherwise required under Rule 424(b), the Trust
will cause the Trust Prospectus, properly completed, and any supplement
thereto to be filed with the Commission pursuant to the applicable
paragraph of Rule 424(b) within the time period prescribed and will
provide evidence satisfactory to the Representatives of such timely
filing. The Trust will promptly advise the Representatives (1) when the
Trust Registration Statement, if not effective at the Execution Time,
shall have become effective, (2) when the Trust Prospectus, and any
supplement thereto, shall have been filed (if required) with the
Commission pursuant to Rule 424(b) or when any Rule 462(b) Trust
Registration Statement shall have been filed with the Commission, (3)
when, prior to termination of the offering of the DECS, any amendment
to the Trust Registration Statement or any Rule 462(b) Trust
Registration Statement, shall have been filed or become effective, (4)
of any request by the Commission or its staff for any amendment of the
Trust Registration Statement, or any Rule 462(b) Trust Registration
Statement, or for any supplement to the Trust Prospectus or for any
additional information, (5) of the issuance by the Commission of any
stop order suspending the effectiveness of the Trust Registration
Statement or the institution or threatening of any proceeding for that
purpose and (6) of the receipt by the Trust of any notification with
respect to the suspension of the qualification of the DECS for sale in
any jurisdiction or the institution or threatening of any proceeding
for such purpose. The Trust will use its best efforts to prevent the
issuance of any such stop order or the suspension of any such
qualification and, if issued, to obtain as soon as possible the
withdrawal thereof.
(b) If, at any time when a prospectus relating to the DECS is
required to be delivered under the Act, any event occurs as a result of
which the Trust Prospectus as then supplemented would include any
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein in the light of the
circumstances under which they were made not misleading, or if it shall
be necessary to amend the Trust Registration Statement or supplement
the Trust Prospectus to comply with the Act or the Exchange Act or the
respective rules thereunder, the Trust promptly will (1) notify the
Representatives of any such event, (2) prepare and file with the
Commission, subject to the second sentence of paragraph (a) of this
Section 7, an amendment or supplement which will correct such statement
or omission or effect such compliance and (3) supply any supplemental
Trust Prospectus to you in such quantities as you may reasonably
request.
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(c) The Trust will furnish to the Representatives and counsel
for the Underwriters, without charge, signed copies of the Trust
Registration Statement (including exhibits thereto) and to each other
Underwriter a copy of the Trust Registration Statement (without
exhibits thereto). The Trust will furnish to the Representatives and
counsel for the Underwriters, without charge, copies of the Trust
Registration Statement (including exhibits thereto). The Trust will
furnish to the Underwriters not later than (i) 12:00 P.M., New York
City time, on the Business Day immediately following the date of
determination of the public offering price of the DECS, if such
determination occurred at or prior to 12:00 noon, New York City time,
on such date or (ii) 9:00 A.M. New York City time, on the second
Business Day immediately following the date on which the public
offering price was determined, if such determination occurred after
12:00 noon, New York City time, on such date, as many copies of each
Preliminary Trust Prospectus, the Trust Prospectus and any supplement
thereto as the Representatives may reasonably request; further, so long
as delivery of a prospectus by an Underwriter or any dealer may be
required by the Act, as many copies of each Preliminary Trust
Prospectus and the Trust Prospectus and any supplement thereto as the
Representatives may reasonably request.
(d) The Trust will arrange, if necessary, for the
qualification of the DECS and the Shares for sale under the laws of
such jurisdictions as the Representatives may designate, will maintain
such qualifications in effect so long as required for the distribution
of the DECS and will pay any fee of the National Association of
Securities Dealers, Inc. (the "NASD"), in connection with its review,
if any, of the Trust Registration Statement and the offering of the
DECS.
8. Agreements of the Company. The Company agrees with the several
Underwriters that:
(a) The Company will use its best efforts to cause the Company
Registration Statement, if not effective at the Execution Time, and any
amendment thereof, to become effective. Prior to the termination of the
offering of the DECS, the Company will not file any amendment of the
Company Registration Statement or supplement to the Company Prospectus
or any Rule 462(b) Company Registration Statement unless the Company
has furnished to you a copy for your review prior to filing and will
not file any such proposed amendment or supplement to which you
reasonably object. Subject to the foregoing sentence, if the Company
Registration Statement has become or becomes effective pursuant to Rule
430A, or filing of the Company Prospectus is otherwise required under
Rule 424(b), the Company will cause the Company Prospectus, properly
completed, and any supplement thereto to be filed with the Commission
pursuant to the applicable paragraph of Rule 424(b) within the time
period prescribed and will provide evidence satisfactory to the
Representatives of such timely filing. The Company will promptly advise
the Representatives (1) when the Company Registration Statement, if not
effective at the Execution Time, shall have become effective, (2) when
the Company Prospectus, and any supplement thereto, shall have been
filed (if required) with the Commission pursuant to Rule 424(b) or when
any Rule 462(b) Company Registration Statement shall
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have been filed with the Commission, (3) when, prior to termination of
the offering of the DECS, any amendment to the Company Registration
Statement shall have been filed or become effective, (4) of any request
by the Commission or its staff for any amendment of the Company
Registration Statement, or any Rule 462(b) Company Registration
Statement, or for any supplement to the Company Prospectus or for any
additional information, (5) of the issuance by the Commission of any
stop order suspending the effectiveness of the Company Registration
Statement or the institution or threatening of any proceeding for that
purpose and (6) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Shares for sale
in any jurisdiction or the institution or threatening of any proceeding
for such purpose. The Company will use its best efforts to prevent the
issuance of any such stop order or the suspension of any such
qualification and, if issued, to obtain as soon as possible the
withdrawal thereof.
(b) If, at any time when a prospectus relating to the Shares
is required to be delivered under the Act (including in respect of the
offering and sale of the DECS), any event occurs as a result of which
the Company Prospectus as then supplemented would include any untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein in the light of the
circumstances under which they were made not misleading, or if it shall
be necessary to amend the Company Registration Statement or supplement
the Company Prospectus to comply with the Act or the Exchange Act or
the respective rules thereunder, the Company promptly will (1) notify
the Representatives of such event, (2) prepare and file with the
Commission, subject to the second sentence of paragraph (a) of this
Section 8, an amendment or supplement which will correct such statement
or omission or effect such compliance and (3) supply any supplemented
Company Prospectus to you in such quantities as you may reasonably
request.
(c) As soon as practicable, the Company will make generally
available to its security holders and to the Representatives an
earnings statement or statements of the Company and its subsidiaries
which will satisfy the provisions of Section 11(a) of the Act and Rule
158 under the Act.
(d) The Company will furnish to the Representatives and
counsel for the Underwriters signed copies of the Company Registration
Statement (including exhibits thereto) and to each other Underwriter a
copy of the Company Registration Statement (without exhibits thereto).
The Company will furnish to the Underwriters not later than (A) 12:00
P.M., New York City time, on the Business Day immediately following the
date of determination of the public offering price of the DECS, if such
determination occurred at or prior to 12:00 noon, New York City time,
on such date or (B) 9:00 A.M., New York City time, on the second
Business Day immediately following the date on which the public
offering price of the DECS was determined, if such determination
occurred after 12:00 noon, New York City time, on such date, as many
copies of each Preliminary Company Prospectus, the Company Prospectus
and any supplement thereto as the Representatives may reasonably
request; further, so long as delivery of a prospectus by
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any Underwriter or any dealer may be required by the Act (including in
respect of the offering and sale of the DECS), as many copies of each
Preliminary Company Prospectus and the Company Prospectus and any
supplement thereto as the Representatives may reasonably request.
(e) The Company will cooperate with the Trust for purposes of
the qualification of the DECS and the Shares for sale under the laws of
such jurisdictions as the Representatives may designate, and will
maintain such qualifications in effect so long as required for the
distribution of the DECS or the Shares; provided that in no event shall
the Company be obligated to qualify to do business in any jurisdiction
where it is not now so qualified or to take any action that would
subject it to service of process in suits, in each case, other than
those arising out of the offering or sale of the DECS, the offering and
sale of the Shares in connection with the offering of the DECS, in any
jurisdiction where it is not now so subject.
(f) The Company will not, without the prior written consent of
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, during the period of 90 days following the
Execution Time, (i) offer, pledge, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant to purchase or otherwise
transfer or dispose of, directly or indirectly, or announce the
offering of any shares of any class of common stock of the Company or
any securities convertible into or exercisable or exchangeable for
shares of any class of common stock of the Company (whether such shares
or any such securities are now owned or hereafter acquired) or (ii)
enter into any swap or other arrangement that transfers to another, in
whole or in part, any of the economic consequences of ownership of
shares of any class of the common stock of the Company, whether any
such transaction described in clause (i) or (ii) above is to be settled
by delivery of shares of any class of common stock of the Company or
such other securities, in cash or otherwise; provided, however, that
the Company may issue, or grant options for, shares of any class of
common stock of the Company pursuant to any stock plan for employees or
directors, or any employee benefit plan, of the Company in effect at
the Execution Time, or pursuant to any stock options outstanding at the
Execution Time. The Company also will not, without the prior written
consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, during the period of 90 days following
the Execution Time, authorize any executive officer or director of the
Company to engage in transactions described in clause (i) or (ii) above
involving more than 10,000 shares of any class of common stock of the
Company, and will not authorize such transactions involving more than
100,000 shares of any class of common stock of the Company in the
aggregate for all such executive officers and directors during such 90
day period.
(g) The Company will furnish the Trust in sufficient
quantities for transmission to holders of the DECS the Company's annual
report to shareholders and reports on Forms 10-K and 10-Q as soon as
practicable after such reports are required to be filed with the
Commission.
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(h) The Company will take such actions as may be reasonably
necessary to comply with the rules and regulations of the Nasdaq
National Market System in respect of the offering of the Shares
contemplated hereby.
(i) The Company will not become an "investment company" as
defined in the Investment Company Act.
(j) Neither the Company nor the Subsidiaries has directly or
indirectly taken any action designed to or which has constituted or
which might reasonably be expected to cause or result, under the
Exchange Act or otherwise, in the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale
of the DECS or the Shares.
9. Agreements of HEA. HEA agrees with each of the Underwriters that:
(a) HEA will not, without the prior written consent of ▇▇▇▇▇▇▇
▇▇▇▇▇ Barney, during the period of 90 days following the Execution
Time, (i) offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant to purchase or otherwise transfer or
dispose of, directly or indirectly, or announce the offering of any
shares of any class of common stock of the Company or any securities
convertible into or exercisable or exchangeable for shares of any class
of common stock of the Company (whether such shares or any such
securities are now owned or hereafter acquired) or (ii) enter into any
swap or other arrangement that transfers to another, in whole or in
part, any of the economic consequences of ownership of shares of any
class of the common stock of the Company, whether any such transaction
described in clause (i) or (ii) above is to be settled by delivery of
shares of any class of common stock of the Company or such other
securities, in cash or otherwise; provided, however, that HEA may
engage in any of the transactions described in clause (i) or (ii) above
in connection with the offering by the Trust of the DECS or any
delivery of Shares pursuant to the terms of the DECS.
(b) HEA will not take any action designed to or which has
constituted or which might reasonably be expected to cause or result,
under the Exchange Act or otherwise, in stabilization or manipulation
of the price of any security of the Company to facilitate the sale or
resale of the DECS or the Shares.
(c) HEA will advise you promptly, and if requested by you,
will confirm such advice in writing, so long as delivery of a
prospectus relating to the Shares (including with respect to the
offering and sale of the DECS) by an Underwriter or dealer may be
required under the Act, of any change in the information in the Company
Registration Statement or the Company Prospectus relating to HEA.
10. Conditions to the Obligations of the Underwriters. The obligations
of the Underwriters to purchase the Underwritten DECS and the Option DECS, as
the case may be, shall be subject to the accuracy of the representations and
warranties on the part of the Trust, the Company and HEA contained herein as of
the Execution Time, the Closing Date and any
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Settlement Date pursuant to Section 4(b) hereof, to the accuracy of the
statements of the Trust, the Company and HEA made in any certificates pursuant
to the provisions hereof, to the performance by each of the Trust, the Company
and HEA of their respective obligations hereunder and to the following
additional conditions:
(a) If the Trust Registration Statement or the Company
Registration Statement has not become effective prior to the Execution
Time, unless the Representatives agree in writing to a later time, such
Trust Registration Statement or Company Registration Statement will
become effective not later than (i) 6:00 P.M. New York City time on the
date of determination of the public offering price of the DECS, if such
determination occurred at or prior to 3:00 P.M. New York City time on
such date or (ii) 9:30 A.M. New York City time on the Business Day
following the day on which the public offering price of the DECS was
determined, if such determination occurred after 3:00 P.M. New York
City time on such date; if filing of the Trust Prospectus or the
Company Prospectus, or any supplement thereto, is required pursuant to
Rule 497(h) or Rule 424(b), such Trust Prospectus or Company
Prospectus, and any such supplement, will be filed in the manner and
within the time period required by such Rule; and no stop order
suspending the effectiveness of the Trust Registration Statement or the
Company Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or threatened.
(b) The Representatives shall have received the opinion of
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Finger, special Delaware counsel for the Trust,
dated the Closing Date and addressed to the Representatives, with
respect to such matters as the Representatives may reasonably request.
(c) The Company shall have caused ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ & Freidenrich
LLP, counsel for the Company, to have furnished to the Representatives
their opinion, dated the Closing Date and addressed to the
Representatives, to the effect that:
(i) the Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Delaware, with corporate power and
authority to own or lease, as the case may be, and to operate
its properties and conduct its businesses as described in the
Company Prospectus, and is duly qualified to do business as
foreign corporation and is in good standing under the laws of
the State of California and, to the knowledge of such counsel,
each other jurisdiction which requires such qualification,
except where the failure to be so qualified or be in good
standing could not reasonably be expected to have a Material
Adverse Effect.
(ii) except as otherwise set forth in the Company
Prospectus, all outstanding shares of capital stock of each
Subsidiary are owned of record by the Company or by another
Subsidiary;
(iii) the Company's authorized equity capitalization
is as set forth in the Company Prospectus; the capital stock
of the Company conforms in all material
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respects to the description thereof contained in the Company
Prospectus; the outstanding Shares have been duly and validly
authorized and issued and are fully paid and nonassessable;
and the Shares are duly listed, and admitted and authorized
for trading on the Nasdaq National Market System; the
certificates for the Shares are in valid and sufficient form;
the holders of outstanding shares of capital stock of the
Company are not entitled to preemptive rights under the
Company's charter documents, Delaware corporate law or any
agreements of which such counsel is aware, or to such
counsel's knowledge, similar rights to subscribe for the
Shares except for the ownership maintenance rights granted to
HEA under the Stockholder Agreement, which do not apply to the
Shares subject to the Contract; and, to the knowledge of such
counsel and except as set forth in the Company Prospectus and
the options granted to employees in the ordinary course of
business since the end of the Company's fiscal year ended
December 27, 1998, no options, warrants or other rights to
purchase, agreements or other obligations to issue, or rights
to convert any obligations into or exchange any securities
for, shares of capital stock of or ownership interests in the
Company are outstanding, except options granted to employees
in the ordinary course of business since the end of the
Company's fiscal year ended December 26, 1998;
(iv) to the knowledge of such counsel, there is no
pending or threatened action, suit or proceeding by or before
any court or governmental agency, authority or body or any
arbitrator involving the Company or any Subsidiaries or its or
their property of a character required to be disclosed in the
Company Registration Statement which is not adequately
disclosed in the Company Prospectus, and, to the knowledge of
such counsel, there is no franchise, contract or other
document of a character required to be described in the
Company Registration Statement or Company Prospectus, or to be
filed as an exhibit thereto, which is not described or filed
as required under the Act or the applicable rules and
regulations of the Commission thereunder; and the statements
in the Company Prospectus under the headings "Risk
Factors--Protection of Our Intellectual Property is Limited;
We Face Risk of Third Party Claims of Infringement," "--We are
the Subject of legal Proceedings and Claims", "Relationship
Between Maxtor and Hyundai," "Certain Transactions,"
"Management--Executive Compensation," "--Employment
Agreements" and "Benefit Plans" accurately summarize in all
material respects the matters therein described to the extent
they are matters of law and descriptions of contractual
arrangements;
(v) the Company Registration Statement has become
effective under the Act; any required filing of the Company
Prospectus, and any supplements thereto, pursuant to Rule
424(b) has been made in the manner and within the time period
required by Rule 424(b); to the knowledge of such counsel, no
stop order suspending the effectiveness of the Company
Registration Statement has been issued, no proceedings for
that purpose have been instituted or threatened and the
Company Registration Statement and the Company Prospectus
(other than the
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financial statements, schedules and other financial
information contained therein, as to which such counsel need
express no opinion) comply as to form in all material respects
with the applicable requirements of the Act and the rules
thereunder;
(vi) this Agreement has been duly authorized,
executed and delivered by the Company (assuming due
authorization and execution by each party thereto other than
the Company);
(vii) the Company is not an "investment company" as
defined in the Investment Company Act of 1940, as amended;
(viii) to the knowledge of such counsel, after due
inquiry, there is no action, proceeding or investigation
pending or threatened against the Company, any of its
subsidiaries or HEA which questions the validity of the
issuance of the DECS or the offering thereof by the
Underwriters;
(ix) no consent, approval, authorization, filing with
or order of any court or governmental agency or body is
required in connection with the transactions contemplated
herein, except such as have been obtained under the Act and
such as may be required under the blue sky laws of any
jurisdiction in connection with the purchase and distribution
of the DECS or the distribution of Shares pursuant to the
terms of the DECS by the Underwriters in the manner
contemplated in this Agreement and in the Trust Prospectus or
the Company Prospectus and such other approvals (specified in
such opinion) as have been obtained;
(x) neither the performance of this Agreement by the
Company, the distribution of the Shares nor the consummation
of any other of the transactions herein contemplated nor the
fulfillment of the terms hereof will conflict with, result in
a breach or violation of or imposition of any lien, charge or
encumbrance upon any property or assets of the Company
pursuant to, (i) the charter or by-laws of the Company, (ii)
the terms of any indenture, contract, lease, mortgage, deed of
trust, note agreement, loan agreement or other agreement,
obligation, condition, covenant or instrument to which the
Company is a party or bound or to which its property is
subject and that is filed as an exhibit to the Company
Registration Statement, or (iii) any statute, law, rule or
regulation which, in the experience of such counsel, typically
is applicable to the types of transactions contemplated herein
or, to the knowledge of such counsel, any judgment, order or
decree applicable to the Company of any court, regulatory
body, administrative agency, governmental body, arbitrator or
other authority asserting jurisdiction over the Company or any
of its properties; and
(xi) to the knowledge of such counsel, no holders of
securities of the Company have rights to the registration of
such securities under the Company
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Registration Statement except for rights granted to HEA under
the Stockholder Agreement.
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction other
than the State of California, the General Corporation Law of the State
of Delaware or the Federal laws of the United States, to the extent
they deem proper and specified in such opinion, upon the opinion of
other counsel of good standing whom they believe to be reliable and who
are reasonably satisfactory to counsel for the Underwriters and (B) as
to matters of fact, to the extent they deem proper, on certificates of
responsible officers of the Company and public officials. References to
the Company Prospectus in this paragraph (c) include any supplements
thereto at the Closing Date.
In addition, such counsel shall state that such counsel has
participated in conferences and in telephone conversations with
officers and other representatives of the Company, representatives of
HEA, representatives of the Representatives and representatives of the
independent public accountants of the Company, during which conferences
and conversations the contents of the Company Registration Statement
and the Company Prospectus were discussed, and such counsel has
reviewed certain corporate records and documents furnished to such
counsel by the Company and that, although such counsel has not
undertaken to independently verify and does not assume any
responsibility for the accuracy, completeness or fairness of the
statements contained in the Company Registration Statement and the
Company Prospectus (except as specified in the foregoing opinion), on
the basis of the foregoing, and such counsel's understanding of the
U.S. federal securities laws, no information has come to the attention
of such counsel that causes such counsel to believe that the Company
Registration Statement on the Effective Date or at the Execution Time
contained any untrue statement of a material fact or omitted to state
any material fact required to be stated therein or necessary to make
the statements therein not misleading or that the Company Prospectus as
of its date and on the Closing Date included or includes any untrue
statement of a material fact or omitted or omits to state a material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading (other than
financial statements and schedules and other financial information
contained therein, as to which such counsel need express no opinion).
(d) The Company shall have caused counsel for Maxtor Singapore
(such counsel to be reasonably satisfactory to the Representatives) to
have furnished to the Representatives an opinion, dated the Closing
Date and addressed to the Representatives, to the effect that:
(i) Maxtor Singapore has been duly incorporated and
is validly existing as a corporation in good standing under
the laws of the jurisdiction in which it is chartered or
organized, with corporate power and authority to own or lease,
as the case may be, and to operate its properties and conduct
its businesses as described in the Company Prospectus, and, to
the knowledge of such counsel, is duly
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27
qualified to do business as a foreign corporation and is in
good standing under the laws of each jurisdiction which
requires such qualification, except where the failure to be so
qualified or be in good standing could not reasonably be
expected to have a material adverse effect on the condition
(financial or otherwise), prospects, earnings, business or
properties of Maxtor Singapore, whether or not arising from
transactions in the ordinary course of business;
(ii) all the outstanding shares of capital stock of
Maxtor Singapore have been duly and validly authorized and
issued and are fully paid and nonassessable, and except as
otherwise set forth in the Company Prospectus, are owned of
record by the Company;
(iii) to the knowledge of such counsel, there is no
pending or threatened action, suit or proceeding by or before
any court or governmental agency, authority or body or any
arbitrator involving Maxtor Singapore or its property which,
if determined adversely to Maxtor Singapore could reasonably
be expected to have, individually or in the aggregate, a
material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of
Maxtor Singapore, whether or not arising from transactions in
the ordinary course of business; and
(iv) neither the performance of this Agreement by the
Company, the distribution of the Shares nor the consummation
of any other of the transactions herein contemplated nor the
fulfillment of the terms hereof will conflict with, result in
a breach or violation of or imposition of any lien, charge or
encumbrance upon any property or assets of Maxtor Singapore
pursuant to, (i) the charter or by-laws of Maxtor Singapore,
(ii) to the knowledge of such counsel, the terms of any
material indenture, contract, lease, mortgage, deed of trust,
note agreement, loan agreement or other material agreement,
obligation, condition, covenant or instrument to which Maxtor
Singapore is a party or bound or to which its property is
subject, or (iii) any statute, law, rule or regulation which,
in the experience of such counsel, typically is applicable to
the types of transactions contemplated herein or, to the
knowledge of such counsel, any judgment, order or decree
applicable to Maxtor Singapore of any court, regulatory body,
administrative agency, governmental body, arbitrator or other
authority asserting jurisdiction over Maxtor Singapore or any
of its property.
In rendering such opinion, such counsel may rely as to matters
of fact, to the extent they deem proper and specified in such opinion,
upon certificates of responsible officers of the Company, Maxtor
Singapore and public officials. References to the Company Prospectus in
this paragraph (d) include any supplements thereto at the Closing Date.
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(e) HEA shall have caused ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ & Freidenrich LLP,
counsel for HEA, to have furnished to the Representatives his opinion
dated the Closing Date and addressed to the Representatives, to the
effect that:
(i) HEA is duly incorporated and is validly existing
as a corporation in good standing under the laws of the
jurisdiction in which it is chartered or organized, with
corporate power and authority to own or lease, as the case may
be, and to operate its properties and conduct its business as
described in the Company Prospectus;
(ii) this Agreement has been duly authorized,
executed and delivered by HEA; the Contract, the Collateral
Agreement and the Reimbursement Agreement have been duly
authorized, executed and delivered by HEA and assuming due
authorization, execution and delivery by the other parties
thereto, constitute valid and legally binding agreement of
HEA; and HEA has corporate power and authority to sell,
transfer and deliver Shares in connection with the offering of
the DECS in the manner provided in this Agreement and the
Contract;
(iii) HEA is not, and after giving effect to the
distribution of the Shares in connection with the offering of
the DECS and the application of the proceeds thereof, will not
be, an "investment company" as defined in the Investment
Company Act of 1940, as amended;
(iv) the Collateral Agreement creates a valid
security interest in favor of the Collateral Agent (as defined
therein) for the benefit of the Trust in the Shares pledged
thereunder as security for the performance by HEA of its
obligations under the Contract and to secure the observance
and performance of the covenants and agreements of HEA
contained in the Contract and the Collateral Agreement;
(vi) pursuant to Section 9-103(6) of the California
UCC as currently in effect, the perfection and the effect of
perfection or non-perfection of the security interest of the
Trust in the Shares pledged pursuant to the Contract and the
Collateral Agreement will be governed by the laws of the State
of New York, assuming the Share certificates are located in
New York at all times.
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction other
than the State of California, the General Corporation Law of the State
of Delaware or the Federal laws of the United States, to the extent
they deem proper and specified in such opinion, upon the opinion of
other counsel of good standing whom they believe to be reliable and who
are satisfactory to counsel for the Underwriters, and (B) as to matters
of fact, to the extent it deems proper, on certificates of responsible
officers of HEA and public officials.
(f) HEA shall have caused ▇▇▇ ▇▇▇▇▇▇▇, counsel for HEA, to
have furnished to the Representatives his opinion dated the Closing
Date and addressed to the Representatives, to the effect that:
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(i) HEA is duly incorporated and is validly existing
as a corporation in good standing under the laws of the State
of California, with corporate power and authority to own or
lease, as the case may be, and to operate its properties and
conduct its business as described in the Company Prospectus;
to the knowledge of such counsel, is duly qualified to do
business as a foreign corporation and is in good standing
under the laws of each jurisdiction which requires such
qualification, except where the failure to be so qualified or
be in good standing could not reasonably be expected to have a
material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of HEA
and its subsidiaries, taken as a whole, whether or not arising
from transactions in the ordinary course of business;
(ii) this Agreement has been duly authorized,
executed and delivered by HEA; the Contract, the Collateral
Agreement and the Reimbursement Agreement have been duly
authorized, executed and delivered by HEA and assuming due
authorization, execution and delivery by the other parties
thereto, constitute valid and legally binding agreement of
HEA; and HEA has full legal right and authority to sell,
transfer and deliver Shares in connection with the offering of
the DECS in the manner provided in this Agreement and the
Contract;
(iii) no consent, approval, authorization, filing
with or order of any court or governmental agency or body is
required for the consummation by HEA of the transactions
contemplated herein, except such as may have been obtained
under the Act and such as may be required under the blue sky
laws of any jurisdiction in connection with the purchase and
distribution of the DECS by the Underwriters and the
distribution of the Shares pursuant to the terms of the DECS
in the manner contemplated in this Agreement and in the Trust
Prospectus and the Company Prospectus;
(iv) neither the performance of this Agreement by
HEA, the distribution of the Shares nor the consummation of
any other of the transactions herein contemplated nor the
fulfillment of the terms hereof will conflict with, result in
a breach or violation of or imposition of any lien, charge or
encumbrance upon any property or assets of HEA pursuant to,
(i) the charter or by-laws of the HEA, (ii) to the knowledge
of such counsel, the terms of any material indenture,
contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other material agreement, obligation, condition,
covenant or instrument to which HEA is a party or bound or to
which its property is subject, or (iii) any statute, law, rule
or regulation which, in the experience of such counsel,
typically is applicable to the types of transactions
contemplated herein or, to the knowledge of such counsel, any
judgment, order or decree applicable to HEA of any court,
regulatory body, administrative agency, governmental body,
arbitrator or other authority asserting jurisdiction over HEA
or any of its properties.
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30
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction other
than the State of California, the General Corporation Law of the State
of Delaware or the Federal laws of the United States, to the extent he
deems proper and specified in such opinion, upon the opinion of other
counsel of good standing whom he believes to be reliable and who are
satisfactory to counsel for the Underwriters, and (B) as to matters of
fact, to the extent it deems proper, on certificates of responsible
officers of HEA and public officials.
(g) The Representatives shall have received from Cleary,
Gottlieb, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the Underwriters and the Trust,
such opinion or opinions, dated the Closing Date and addressed to the
Representatives, with respect to the issuance and sale of the DECS, the
Trust Registration Statement, the Trust Prospectus (together with any
supplement thereto), the Fundamental Documents, the Company
Registration Statement, the Company Prospectus (together with any
supplement thereto) and other related matters as the Representatives
may reasonably require, and the Company shall have furnished to such
counsel such documents as they reasonably request for the purpose of
enabling them to pass upon such matters.
(h) The Trust shall have furnished to the Representatives a
certificate of the Trust, signed by the Managing Trustee and dated the
Closing Date, to the effect that:
(i) the representations and warranties of the Trust
in this Agreement are true and correct in all material
respects on and as of the Closing Date with the same effect as
if made on the Closing Date and the Trust has complied in all
material respects with all of the agreements and satisfied all
the conditions on its part to be performed or satisfied at or
prior to the Closing Date (such certificate to set forth all
known failures to comply with such agreements or satisfy such
conditions whether such known failures are material or
immaterial); and
(ii) no stop order suspending the effectiveness of
the Trust Registration Statement or the use of the Trust
Prospectus has been issued and to the Trust's knowlege after
due inquiry, no proceedings for that purpose have been
instituted or, to the Trust's knowledge, threatened.
(i) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the Chief Executive Officer and
the Chief Financial Officer of the Company, dated the Closing Date, to
the effect that the signers of such certificate have carefully examined
the Company Registration Statement, the Company Prospectus, any
supplements to the Company Prospectus and this Agreement and that:
(i) the representations and warranties of the Company
in this Agreement are true and correct on and as of the
Closing Date with the same effect as if made on the Closing
Date and the Company has complied in all material respects
with all the agreements and satisfied all the conditions on
its part to be performed or satisfied at or prior to the
Closing Date (such certificate to set forth
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31
all known failures to comply with such agreements or satisfy
such conditions whether such known failures are material or
immaterial);
(ii) no stop order suspending the effectiveness of
the Company Registration Statement or the use of the Company
Prospectus has been issued and to the Company's knowledge,
after due inquiry with the Commission, no proceedings for that
purpose have been instituted or, to the Company's knowledge,
threatened; and
(iii) since the date of the most recent financial
statements included in the Company Prospectus (exclusive of
any supplement thereto), there has been no material adverse
effect on the condition (financial or otherwise), prospects,
earnings, business or properties of the Company and the
Subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set
forth in or contemplated in the Company Prospectus (exclusive
of any supplement thereto).
(j) HEA shall have furnished to the Representatives a
certificate, signed by the Chief Executive Officer, dated the Closing
Date, to the effect that the signer of such certificate has carefully
examined the Company Registration Statement, the Company Prospectus,
any supplement to the Company Prospectus and this Agreement and that
the representations and warranties of HEA in this Agreement are true
and correct in all material respects on and as of the Closing Date to
the same effect as if made on the Closing Date and HEA has complied in
all material respect with all the agreements and satisfied in all
material respect all the conditions on its part to be performed or
satisfied at or prior to the Closing Date (such certificate to set
forth all known failures to comply with such agreements or satisfy such
conditions whether such known failures are material or immaterial);
(k) The Company shall have caused PricewaterhouseCoopers LLP
to have furnished to the Representatives letters, at the Execution Time
and at the Closing Date, dated respectively as of the Execution Time
and as of the Closing Date, in form and substance satisfactory to the
Representatives, confirming that they are independent accountants
within the meaning of the Act and the Exchange Act and the respective
applicable published rules and regulations adopted by the Commission
thereunder and stating in effect that:
(i) in their opinion the audited financial statements
and financial statement schedule included in the Company
Registration Statement and the Company Prospectus and reported
on by them comply as to form in all material respects with the
applicable accounting requirements of the Act and Exchange Act
and the related published rules and regulations adopted by the
Commission;
(ii) on the basis of a reading of the latest
unaudited financial statements made available by the Company
and the Subsidiaries; carrying out certain
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32
specified procedures (but not an examination in accordance
with generally accepted auditing standards) which would not
necessarily reveal matters of significance with respect to the
comments set forth in such letter; a reading of the minutes of
the meetings of the stockholders, directors and the audit,
executive and compensation committees of the Company and its
subsidiaries; and inquiries of certain officials of the
Company who have responsibility for financial and accounting
matters of the Company and its subsidiaries as to transactions
and events subsequent to December 26, 1998, nothing came to
their attention which caused them to believe that:
(1) any unaudited financial statements included or
incorporated by reference in the Company Registration
Statement and the Company Prospectus do not comply as
to form in all material respects with applicable
accounting requirements of the Act and with the
related rules and regulations adopted by the
Commission with respect to financial statements
included or incorporated by reference in quarterly
reports on Form 10-Q under the Exchange Act; and said
unaudited financial statements are not in conformity
with generally accepted accounting principles applied
on a basis substantially consistent with that of the
audited financial statements included in the Company
Registration Statement and the Company Prospectus;
(2) with respect to the period subsequent to December
26, 1998, there were any changes, at a specified date
not more than five business days prior to the date of
the letter, in the long-term debt and capital lease
obligations due after one year of the Company or
capital stock of the Company or any increase in the
shareholders' deficit of the Company or decreases in
net current assets or total assets of the Company as
compared with the amounts shown on the December 26,
1998, consolidated balance sheet included or
incorporated in the Company Registration Statement
and the Company Prospectus, or for the period from
December 26, 1998 to such specified date there were
any decreases, as compared with the corresponding
period in the preceding year, in total revenue or
income from operations or income before income taxes
or in total or per share amounts of net income of the
Company, except in all instances for changes or
decreases set forth in such letter, in which case the
letter shall be accompanied by an explanation by the
Company as to the significance thereof unless said
explanation is not deemed necessary by the
Representatives; or
(ii) the information included or incorporated in the
Company Registration Statement and Company Prospectus in
response to Regulation S-K, Item 301 (Selected Financial
Data), Item 302 (Supplementary Financial Information) and
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33
Item 402 (Executive Compensation) is not in conformity with
the applicable disclosure requirements of Regulation S-K;
(iii) they have performed certain other specified
procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature
(which is limited to accounting, financial or statistical
information derived from the general accounting records of the
Company and its subsidiaries) set forth in the Company
Registration Statement and the Company Prospectus, including
the information set forth under the captions "Selected
Consolidated Financial Data," "Capitalization," "Management's
Discussion and Analysis of Financial Condition and Results of
Operations," "Business" and "Certain Transactions" in the
Company Prospectus and the information included or
incorporated by reference in Items 1, 2, 6, 7, and 11 of the
Company's Annual Report on Form 10-K, incorporated in the
Company Registration Statement and the Company Prospectus,
agrees with the accounting records of the Company and its
subsidiaries, excluding any questions of legal interpretation.
References to the Company Prospectus in this paragraph (k) include any
supplement thereto at the date of the letter.
(l) The Shares shall have been duly approved for quotation
through the Nasdaq National Market System, and satisfactory evidence of
such action shall have been provided to the Representatives.
(m) The DECS shall have been approved for listing on the
Nasdaq National Market System, subject only to official notice of
issuance.
(n) Subsequent to the Execution Time or, if earlier, the dates
as of which information is given in the Company Registration Statement
(exclusive of any amendment thereof) and the Company Prospectus
(exclusive of any supplement thereto), there shall not have been (i)
any change or decrease specified in the letter or letters referred to
in paragraph (k) of this Section 10 or (ii) any change, or any
development involving a prospective change, in or affecting the
condition (financial or otherwise), earnings, business or properties of
the Company and the Subsidiaries taken as a whole, whether or not
arising from transactions in the ordinary course of business, except as
set forth in or contemplated in the Company Prospectus (exclusive of
any supplement thereto) the effect of which, in any case referred to in
clause (i) or (ii) above, is, in the judgment of the Representatives,
so material and adverse as to make it impractical or inadvisable to
proceed with the offering or delivery of the DECS as contemplated by
the Trust Registration Statement and the Company Registration Statement
(in either case, exclusive of any amendment thereof) and the Trust
Prospectus and the Company Prospectus (in either case, exclusive of any
supplement thereto).
(o) Subsequent to the Execution Time, there shall not have
been any decrease in the rating of any of the Company's debt securities
by any "nationally recognized statistical rating organization" (as
defined for purposes of Rule 436(g) under the Act) or
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34
any notice given of any intended or potential decrease in any such
rating or of a possible change in any such rating that does not
indicate the direction of the possible change.
(p) The NASD shall not have raised any objection with respect
to the fairness and reasonableness of the underwriting terms and
arrangements.
(q) Each Fundamental Agreement shall have been executed and
delivered by all parties thereto, and HEA shall have delivered to the
Collateral Agent the number of Shares required by the Collateral
Agreement to be initially pledged and assigned by HEA in accordance
with the requirements of the Collateral Agreement.
(r) At the Execution Time, the Company shall have furnished to
the Representatives a letter substantially in the form of Exhibit A
hereto from each executive officer and director of the Company, which
persons are listed on Schedule II hereto, addressed to the
Representatives relating to sales and certain other dispositions of
shares of common stock of the Company or certain other securities, and
such letter agreements shall be in full force and effect on the Closing
Date.
(s) Prior to the Closing Date, the Company, the Trust and HEA
shall have furnished to the Representatives such further information,
certificates and documents as the Representatives may reasonably
request.
If any of the conditions specified in this Section 10 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Representatives and counsel for the Underwriters, this
Agreement and all obligations of the Underwriters hereunder may be canceled at,
or at any time prior to, the Closing Date by the Representatives. Notice of such
cancellation shall be given to the Trust, the Company and HEA in writing or by
telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 10 shall be
delivered at the office of ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ & Freidenrich LLP, counsel for the
Company, at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, on the Closing
Date.
11. Expenses.
(a) HEA and the Company, severally and jointly, will pay all expenses
incident to the performance by the Trust and their obligations under this
Agreement and the Contract and Collateral Agreement, including (i) the
preparation, printing and filing of the Notification and the Trust Registration
Statement (including financial statements and exhibits) as originally filed and
of each amendment thereto, (ii) the preparation, printing and delivery of this
Agreement, the Trust Agreement, each of the Fundamental Agreements and such
other documents as may be required in connection with the offering, purchase,
sale, issuance or delivery of the DECS, (iii) the preparation, issuance and
delivery of the certificates for the DECS to the Representatives, (iv) the fees
and disbursements of the Trust's counsel, accountants and
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35
other advisors, (v) the fees and disbursements of HEA's counsel and other
advisors, (vi) the qualification of the DECS under state securities laws in
accordance with the provisions of Section 7(d) hereof, including filing fees and
the reasonable fees and disbursements of the counsel for the Underwriters in
connection therewith and in connection with the preparation of the related blue
sky survey and any supplement thereto, (vii) the printing and delivery to the
Representatives of copies of each Preliminary Trust Prospectus, the Trust
Prospectus and any amendments or supplements thereto, (viii) the fees and
expenses of any transfer agent or registrar for the DECS, (ix) the filing fees
incident to, and the reasonable fees and disbursements of counsel to the
Underwriters in connection with, securing any required review by the NASD of the
Trust Registration Statement and the offering of the DECS in accordance with the
provisions of Section 7(d) hereof, (x) the fees and expenses incurred in
connection with the listing of the DECS on the Nasdaq National Market System and
(xi) the fees and expenses incurred in connection with the preparation and
filing of a registration statement under the Exchange Act relating to the DECS.
HEA and the Company, severally and jointly, will reimburse the Underwriters
through ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ on the Closing Date in immediately available funds
for the Up-Front Fee Amount and the Up-Front Expense Amount (each as defined in
the Fund Expense Agreement dated as of the Closing Date between ▇▇▇▇▇▇▇ ▇▇▇▇▇
Barney and BoNY) and for the up-front fees of the trustees of the Trust paid by
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇.
(b) HEA and the Company, severally and jointly, will pay all expenses
incident to the performance by the Company of its obligations under this
Agreement, including (i) the preparation, printing and filing of the Company
Registration Statement (including financial statements and exhibits) as
originally filed and of each amendment thereto, (ii) the preparation, issuance
and delivery of the certificates for the Shares to the Trust, (iii) the fees and
disbursements of the Company's counsel, accountants and other advisors, (iv) the
qualification of the Shares under state securities laws in accordance with the
provisions of Section 8(e) hereof, including filing fees and the reasonable fees
and disbursements of counsel for the Underwriters in connection therewith and in
connection with the preparation of any related blue sky survey and any
supplement thereto, (v) the printing and delivery to the Representatives of
copies of each Preliminary Company Prospectus, the Company Prospectus and any
amendments or supplements thereto, (vi) the fees and expenses of any transfer
agent or registrar for the Shares, (vii) the filing fees incident to, and the
reasonable fees and disbursements of counsel to the Underwriters in connection
with, securing any required review by the NASD of the Company Registration
Statement and the offering of the Shares in accordance with the provisions of
Section 8(e) hereof and (viii) the fees and expenses incurred in connection with
the approval of the Shares for quotation through the Nasdaq National Market
System.
(c) If the sale of the DECS provided for herein is not consummated
because any condition to the obligations of the Underwriters set forth in
Section 10 hereof is not satisfied, because of any termination pursuant to
Section 15 hereof or because of any refusal, inability or failure on the part of
the Company or HEA to perform any agreement herein or comply with any provision
hereof other than by reason of a default by the Underwriters, HEA and the
Company, jointly and severally, will reimburse the Underwriters through ▇▇▇▇▇▇▇
▇▇▇▇▇ Barney upon demand for all out-of-pocket expenses (including reasonable
fees and disbursements of counsel)
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36
that shall have been incurred by the Underwriters in connection with the
proposed purchase and sale of the DECS.
(d) The provisions of this Section 11 shall not supersede or otherwise
affect any agreement that the Company and HEA may otherwise have for the
allocation of such expenses among themselves.
12. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless the Trust, each
of the Trustees, each Underwriter, the directors, officers, employees and agents
of each Underwriter, and each person who controls the Trust or any Underwriter
within the meaning of the Act, the Exchange Act or other Federal or state
statutory law or regulation, at common law or otherwise, against any and all
losses, claims, damages or liabilities, joint or several, to which they or any
of them may become subject under the Act, the Exchange Act or other Federal or
state statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Company Registration Statement as originally
filed or in any amendment thereof, or in any Preliminary Company Prospectus or
the Company Prospectus, or in any amendment thereof or supplement thereto (each
such document, a "Company Registration Document"), or the omission or alleged
omission to state in any Company Registration Document a material fact required
to be stated therein or necessary to make the statements therein not misleading;
and in each such case agrees to reimburse each such indemnified party, as
incurred, for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company in any such case will
not be liable to the extent that any such loss, claim, damage or liability
arises out of or is based upon any such untrue statement or alleged untrue
statement or omission or alleged omission made in any Company Registration
Document in reliance upon and in conformity with written information furnished
to the Company, HEA or the Trust by or on behalf of any Underwriter through the
Representatives specifically for inclusion therein. This indemnity agreement
will be in addition to any liability which the Company may otherwise have.
(b) HEA agrees to indemnify and hold harmless the Trust, each of the
Trustees, each Underwriter, the directors, officers, employees and agents of
each Underwriter, and each person who controls the Trust or any Underwriter
within the meaning of the Act, the Exchange Act or other Federal or state
statutory law or regulation, at common law or otherwise, against any and all
losses, claims, damages or liabilities, joint or several, to which they or any
of them may become subject under the Act, the Exchange Act or other Federal or
state statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Trust Registration Statement as originally filed
or in any amendment thereof, or in any Preliminary Trust Prospectus or the Trust
Prospectus, or in any amendment thereto or supplement thereto (each such
document, a "Trust Registration Document") or the omission or alleged omission
to state in any Trust Registration
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37
Document a material fact required to be stated therein or necessary to make the
statements therein not misleading; and in each such case agrees to reimburse
each such indemnified party, as incurred, for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that HEA in
any such case will not be liable to the extent that any such loss, claim, damage
or liability arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made in any Trust Registration
Document in reliance upon and in conformity with written information furnished
to the Company, HEA or the Trust by or on behalf of any Underwriter through the
Representatives specifically for inclusion therein. This indemnity agreement
will be in addition to any liability which HEA may otherwise have.
(c) Each Underwriter severally and not jointly agrees to indemnify and
hold harmless the Company, each of its directors, each of its officers who signs
the Company Registration Statement, each person who controls the Company within
the meaning of the Act, the Exchange Act, to the same extent as the foregoing
indemnity in clause (a) to each Underwriter, but only with reference to written
information relating to such Underwriter furnished to the Company or the Trust
by or on behalf of such Underwriter through the Representatives specifically for
inclusion in the Company Registration Documents. This indemnity agreement will
be in addition to any liability which any Underwriter may otherwise have. The
Company acknowledges that the statements set forth under the heading "Plan of
Distribution," (i) the list of Underwriters and their respective participation
in the sale of the DECS, (ii) the sentences related to concessions and
reallowances and (iii) the paragraph related to stabilization, syndicate
covering transactions and penalty bids in any Preliminary Company Prospectus or
the Company Prospectus, constitute the only information furnished in writing by
or on behalf of the several Underwriters for inclusion in any Company
Registration Document.
(d) Each Underwriter severally and not jointly agrees to indemnify and
hold harmless HEA, the directors, officers, employees and agents of HEA, and
each person who controls HEA within the meaning of the Act, to the same extent
as the foregoing indemnity in clause (b) to each Underwriter, but only with
reference to written information relating to such Underwriter furnished to HEA
by or on behalf of such Underwriter through the Representatives specifically for
inclusion in the Trust Registration Documents. This indemnity agreement will be
in addition to any liability which any Underwriter may otherwise have. HEA
acknowledges that the statements set forth in the last paragraph of the cover
page regarding delivery of the DECS, and, under the heading "Underwriting" (i)
the list of Underwriters and their respective participation in the sale of the
DECS, (ii) the sentences related to concessions and reallowances and (iii) the
paragraph related to stabilization, syndicate covering transactions and penalty
bids in any Preliminary Trust Prospectus or the Trust Prospectus, constitute the
only information furnished in writing by or on behalf of the several
Underwriters for inclusion in any Trust Registration Document.
(e) Promptly after receipt by an indemnified party under this Section
12 of notice of the commencement of any action, such indemnified party will, if
a claim in respect thereof is to be made against the indemnifying party under
this Section 12, notify the indemnifying party in writing of the commencement
thereof; but the failure so to notify the indemnifying party (i) will not
relieve it from liability under paragraph (a), (b), (c) or (d) above
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38
unless and to the extent it did not otherwise learn of such action and such
failure results in the forfeiture by the indemnifying party of substantial
rights and defenses and (ii) will not, in any event, relieve the indemnifying
party from obligations to any indemnified party other than the indemnification
obligation provided in paragraph (a), (b), (c) or (d) above. The indemnifying
party shall be entitled to appoint counsel of indemnifying party's choice at the
indemnifying party's expense to represent the indemnified party in any action
for which indemnification is sought (in which case the indemnifying party shall
not thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be satisfactory to the indemnified
party. Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall have
the right to employ separate counsel (including local counsel), and the
indemnifying party shall bear the reasonable fees, costs and expenses of such
separate counsel if (i) the use of counsel chosen by the indemnifying party to
represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, (iii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of the institution of such action or (iv) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party. An indemnifying party will not, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement, compromise or
consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding.
(f) In the event that the indemnity provided in paragraph (a) or (c) of
this Section 12 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and the Underwriters severally
agree to contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating or defending same) (collectively "Losses") to which the Company
and one or more of the Underwriters may be subject in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and by the Underwriters on the other from the offering of the DECS;
provided, however, that in no case shall any Underwriter (except as may be
provided in any agreement among the underwriters relating to the offering of the
DECS) be responsible for any amount in excess of the underwriting discount
applicable to the DECS purchased by such Underwriter hereunder. If the
allocation provided by the immediately preceding sentence is unavailable for any
reason, the Company and the Underwriters severally shall contribute in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Company on one hand and of the Underwriters on the
other in connection with the statements or omissions which resulted in such
Losses as well as any other relevant equitable considerations. The benefits
received by the Company shall be deemed to be
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39
equal to the total net proceeds from the offering (before deducting expenses)
received by the Trust, and the benefits received by the Underwriters shall be
deemed to be equal to the total underwriting discounts and commissions, in each
case as set forth on the cover page of the Trust Prospectus and, as between the
Company and the Underwriters, the Company shall be deemed for this purpose to
have received such total net proceeds as are received by the Trust. Relative
fault shall be determined by reference to, among other things, whether any
untrue or any alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information provided by the
Company on the one hand or the Underwriters on the other, the intent of the
parties and their relative knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The Company and the
Underwriters agree that it would not be just and equitable if contribution were
determined by pro rata allocation or any other method of allocation which does
not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (f), no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 12, each person who
controls an Underwriter within the meaning of either the Act or the Exchange Act
and each director, officer, employee and agent of an Underwriter shall have the
same rights to contribution as such Underwriter; and each person who controls
the Company within the meaning of either the Act or the Exchange Act, each
officer of the Company who shall have signed the Company Registration Statement
and each director of the Company shall have the same rights to contribution as
the Company; subject in each case to the applicable terms and conditions of this
paragraph (f).
(g) In the event that the indemnity provided in paragraph (b) or (d) of
this Section 12 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, HEA and the Underwriters severally agree to
contribute to the aggregate losses, claims, damages and liabilities (including
legal or other expenses reasonably incurred in connection with investigating or
defending same) (collectively "Losses") to which HEA and one or more of the
Underwriters may be subject in such proportion as is appropriate to reflect the
relative benefits received by HEA on the one hand and by the Underwriters on the
other from the offering of the DECS; provided, however, that in no case shall
any Underwriter (except as may be provided in any agreement among the
underwriters relating to the offering of the DECS) be responsible for any amount
in excess of the underwriting discount applicable to the DECS purchased by such
Underwriter hereunder. If the allocation provided by the immediately preceding
sentence is unavailable for any reason, HEA and the Underwriters severally shall
contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of HEA on one hand and of the
Underwriters on the other in connection with the statements or omissions which
resulted in such Losses as well as any other relevant equitable considerations.
The benefits received by HEA shall be deemed to be equal to the total net
proceeds from the offering (before deducting expenses) received by the Trust,
and the benefits received by the Underwriters shall be deemed to be equal to the
total underwriting discounts and commissions, in each case as set forth on the
cover page of the Trust Prospectus and, as between HEA and the Underwriters, HEA
shall be deemed for this purpose to have received such total net proceeds as are
received by the Trust. Relative fault shall be determined by reference to, among
other things, whether any untrue or any alleged untrue statement of a material
fact or the omission or alleged
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40
omission to state a material fact relates to information provided by HEA on the
one hand or the Underwriters on the other, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission. HEA and the Underwriters agree that it would
not be just and equitable if contribution were determined by pro rata allocation
or any other method of allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of this
paragraph (g), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 12, each person who controls an Underwriter within the meaning of
either the Act or the Exchange Act and each director, officer, employee and
agent of an Underwriter shall have the same rights to contribution as such
Underwriter; and each person who controls HEA within the meaning of the Act or
the Exchange Act shall have the same rights to contribution as HEA, subject in
each case to the applicable terms and conditions of this paragraph (g).
13. Default by an Underwriter. If any one or more Underwriters shall
fail to purchase and pay for any of the DECS agreed to be purchased by such
Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the amount of DECS set forth
opposite their names in Schedule I hereto bears to the aggregate amount of DECS
set forth opposite the names of all the remaining Underwriters) the DECS which
the defaulting Underwriter or Underwriters agreed but failed to purchase;
provided, however, that in the event that the aggregate amount of DECS which the
defaulting Underwriter or Underwriters agreed but failed to purchase shall
exceed 10% of the aggregate amount of DECS set forth in Schedule I hereto, the
remaining Underwriters shall have the right to purchase all, but shall not be
under any obligation to purchase any, of the DECS, and if such nondefaulting
Underwriters do not purchase all the DECS, then the Company shall have 36 hours
within which it may, but it is not obligated, to find one or more substitute
underwriters satisfactory to the Representatives to purchase such Securities
upon the terms set forth in this Agreement and if the Company is unable to find
one or more such underwriters that are satisfactory to the Representatives, this
Agreement will terminate without liability to any nondefaulting Underwriter, the
Company, or HEA. In the event of a default by any Underwriter as set forth in
this Section 13, the Closing Date shall be postponed for such period, not
exceeding five Business Days, as the Representatives shall determine in order
that the required changes in the Company Registration Statement, the Company
Prospectus, the Trust Registration Statement and the Trust Prospectus or in any
other documents or arrangements may be effected. Nothing contained in this
Agreement shall relieve any defaulting Underwriter of its liability, if any, to
the Company, HEA and any nondefaulting Underwriter for damages occasioned by its
default hereunder.
14. Termination. This Agreement shall be subject to termination in the
absolute discretion of the Representatives, by notice given to the Trust and the
Company and HEA prior to delivery of and payment for the DECS, if at any time
prior to such time (i) trading in any class of the Company's Common Stock shall
have been suspended by the Commission or the Nasdaq National Market System or
trading in securities generally on the New York Stock
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Exchange or the Nasdaq National Market System shall have been suspended or
limited or minimum prices shall have been established on such Exchange or
National Market System, (ii) a banking moratorium shall have been declared by
either Federal or New York State authorities or (iii) there shall have occurred
any outbreak or escalation of hostilities, declaration by the United States of a
national emergency or war or other calamity or crisis, the effect of which on
financial markets is such as to make it, in the sole judgment of the
Representatives, impractical or inadvisable to proceed with the offering or
delivery of the DECS as contemplated by the Trust Prospectus (exclusive of any
supplement thereto).
15. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Trust, the Company, HEA or their respective officers, if applicable, and of the
Underwriters set forth in or made pursuant to this Agreement will remain in full
force and effect, regardless of any investigation made by or on behalf of any
Underwriter, the Trust, the Company, HEA or any of the officers, directors or
controlling persons referred to in Section 12 hereof, and will survive delivery
of and payment for the DECS. The provisions of Sections 11, 12 and 17 hereof
shall survive the termination or cancellation of this Agreement.
16. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Representatives, will be mailed,
delivered or telefaxed to the ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., General Counsel (fax
no.: (▇▇▇) ▇▇▇-▇▇▇▇) and confirmed to the General Counsel, care of ▇▇▇▇▇▇▇ ▇▇▇▇▇
Barney Inc., at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, attention:
General Counsel; if sent to the Trust, will be mailed, delivered or telefaxed
and confirmed to it at c/o Puglisi & Associates, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇; if sent to the Company,
will be mailed, delivered, telefaxed and confirmed to it at Chief Financial
Officer c/o of Maxtor Corporation, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ (fax no. (▇▇▇) ▇▇▇-▇▇▇▇) and confirmed to the General Counsel c/o Maxtor
Corporation, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (fax no. (303)
▇▇▇-▇▇▇▇), attention of the Legal Department, with a copy to ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
(fax no. (▇▇▇) ▇▇▇-▇▇▇▇) at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ & Freidenrich LLP, ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇; or if sent to HEA, will be mailed,
delivered or telefaxed to Chief Executive Officer, c/o Hyundai Electronics
America, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (fax no. (408)
▇▇▇-▇▇▇▇) and confirmed to the General Counsel c/o Hyundai Electronics America,
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (fax no. (▇▇▇) ▇▇▇-▇▇▇▇),
attention of the Legal Department.
17. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 12 hereof, and no
other person will have any right or obligation hereunder.
18. Applicable Law. This agreement will be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed within the State of New York.
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19. Counterparts. This Agreement may be executed by any one or more of
the parties in any number of counterparts, each of which shall be deemed to be
an original, but all such counterparts shall together constitute one and the
same agreement.
20. Headings. The section headings used herein are for convenience only
and shall not affect the construction hereof.
21. Definitions. The terms which follow, when used in this Agreement,
shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and
the rules and regulations of the Commission promulgated thereunder.
"Business Day" shall mean any day other than a Saturday, a
Sunday or a legal holiday or a day on which banking institutions or
trust companies are authorized or obligated by law to close in New York
City.
"Commission" shall mean the Securities and Exchange
Commission.
"Company Effective Date" shall mean each date and time that
the Company Registration Statement, any post-effective amendment or
amendments thereto and any Rule 462(b) Company Registration Statement
became or become effective.
"Company Prospectus" shall mean the prospectus relating to the
Shares that is used in connection with the offering and sale of the
DECS and that is first filed pursuant to Rule 424(b) after the
Execution Time or, if no filing pursuant to Rule 424(b) is required,
shall mean the form of final prospectus relating to the Shares that is
used in connection with such offering and sale and that is included in
the Company Registration Statement at the Company Effective Date.
"Company Registration Statement" shall mean the registration
statement referred to in Section 2(a) above including incorporated
documents, exhibits and financial statements, as amended at the
Execution Time (or, if not effective at the Execution Time, in the form
in which it shall become effective) and, in the event any
post-effective amendment thereto or any Rule 462(b) Company
Registration Statement becomes effective prior to the Closing Date,
shall also mean such registration statement as so amended or such Rule
462(b) Company Registration Statement, as the case may be. Such term
shall include any Rule 430A Information deemed to be included therein
at the Company Effective Date as provided by Rule 430A.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations of the Commission promulgated
thereunder.
"Execution Time" shall mean the date and time that this
Agreement is executed and delivered by the parties hereto.
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"Investment Company Act" shall mean the Investment Company Act
of 1940, as amended, and the rules and regulations of the Commission
promulgated thereunder.
"Preliminary Company Prospectus" shall mean any preliminary
prospectus referred to in Section 2(a) and any preliminary prospectus
included in the Company Registration Statement at the Company Effective
Date that omits Rule 430A Information.
"Preliminary Trust Prospectus" shall mean any preliminary
prospectus referred to in Section 1(a) above and any preliminary
prospectus included in the Trust Registration Statement at the Trust
Effective Date that omits Rule 430A Information.
"Rule 415," "Rule 424," "Rule 430A," "Rule 462," "Rule
497(h)," "Regulation S-K" and "Regulation S-X" refer to such rules and
regulations under the Act.
"Rule 430A Information" shall mean information with respect to
the DECS, the Shares and the offering thereof permitted to be omitted
from the Trust Registration Statement (or, as used in Section 2 above,
the Company Registration Statement) when it becomes effective pursuant
to Rule 430A.
"Rule 462(b) Company Registration Statement" shall mean a
registration statement and any amendments thereto filed pursuant to
Rule 462(b) relating to the offering covered by the initial
registration statement referred to in Section 2(a) above.
"Rule 462(b) Trust Registration Statement" shall mean a
registration statement and any amendments thereto filed pursuant to
Rule 462(b) relating to the offering covered by the initial
registration statement referred to in Section 1(a) above.
"Trust Effective Date" shall mean each date and time that the
Trust Registration Statement, any post-effective amendment or
amendments thereto and any Rule 462(b) Trust Registration Statement
became or become effective.
"Trust Prospectus" shall mean the prospectus relating to the
DECS that is first filed pursuant to Rule 497(h) after the Execution
Time or, if no filing pursuant to Rule 497(h) is required, shall mean
the form of final prospectus relating to the DECS included in the Trust
Registration Statement at the Trust Effective Date.
"Trust Registration Statement" shall mean the registration
statement referred to in paragraph 1(a) above, including exhibits and
financial statements, as amended at the Execution Time (or, if not
effective at the Execution Time, in the form in which it shall become
effective) and, in the event any post-effective amendment thereto or
any Rule 462(b) Trust Registration Statement becomes effective prior to
the Closing Date, shall also mean such registration statement as so
amended or such Rule 462(b) Trust Registration Statement, as the case
may be. Such term shall include any Rule 430A Information deemed to be
included therein at the Trust Effective Date as provided by Rule 430A.
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As used herein, the terms "Trust Registration Statement,"
"Preliminary Trust Prospectus" and "Trust Prospectus" shall not include
the Company Prospectus attached thereto.
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If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Trust, the Company, HEA and the several Underwriters.
Very truly yours,
DECS Trust IV
By: ____________________________________
Name:
Title:
Maxtor Corporation
By: ____________________________________
Name:
Title:
Hyundai Electronics America
By: ____________________________________
Name:
Title:
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The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
By:___________________________
Name:
Title:
For themselves and the other
several Underwriters named in
Schedule I to the foregoing
Agreement
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SCHEDULE I
NUMBER OF UNDERWRITTEN
DECS TO BE
UNDERWRITERS PURCHASED
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC
▇▇▇▇▇▇ Brothers Inc.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities LLC
Total..................................
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SCHEDULE II
List of Officers, Directors and Shareholders
Executive Officers and Directors
Name Position
---- --------
▇▇. ▇. ▇. ▇▇▇▇ Chairman of the Board of Directors
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ President, Chief Executive Officer, Director
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Director
▇▇▇▇▇ See ▇▇▇▇▇ Director
▇▇▇▇▇▇▇ ▇▇▇▇ Director
Y.H. ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇ Director
▇▇▇▇▇▇ ▇. ▇▇▇▇ Director
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Senior Vice President
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Senior Vice president
▇▇▇▇ ▇. ▇▇▇▇▇▇ Senior Vice President
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Vice President
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Vice President
▇. ▇. ▇▇▇ Vice President
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Vice President
K. H. Teh Vice President
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Vice President
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[FORM OF LOCK-UP AGREEMENT] EXHIBIT A
[LETTERHEAD OF EXECUTIVE OFFICER OR DIRECTOR OF MAXTOR CORPORATION]
Maxtor Corporation
Public Offering by DECS Trust IV
,1999
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC
▇▇▇▇▇▇ Brothers Inc.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
Nations Banc ▇▇▇▇▇▇▇▇▇▇ Securities LLC
As Representatives of the several Underwriters,
c/o ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
This letter is being delivered to you in connection with the
proposed Underwriting Agreement (the "Underwriting Agreement"), among Maxtor
Corporation, a Delaware Corporation (the "Company"), Hyundai Electronics
America, a stockholder of the Company ("HEA"), DECS Trust IV (the "Trust"), a
Delaware business trust, and each of you as representatives of a group of
Underwriters named therein, relating to an underwritten public offering of DECS
representing shares of beneficial interest in the Trust.
In order to induce you and the other Underwriters to enter
into the Underwriting Agreement, the undersigned will not, without the prior
written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., offer, sell, contract to sell,
pledge or otherwise dispose of, (or enter into any transaction which is designed
to, or might reasonably be expected to, result in the disposition (whether by
actual disposition or effective economic disposition due to cash settlement or
otherwise) by the Company or any affiliate of the Company or any person in
privity with the Company or any affiliate of the Company) directly or
indirectly, including the filing (or participation in the filing of) a
registration statement with the Securities and Exchange Commission in respect
of, or establish or increase a put equivalent position or liquidate or decrease
a call equivalent position within the meaning of Section 16 of the Securities
Exchange Act of 1934, as amended, and the rules and regulations of the
Securities and Exchange Commission promulgated thereunder with respect to, any
shares of capital stock of the Company or any securities convertible into, or
exercisable or exchangeable for such capital stock, or publicly announce an
intention to effect any such transaction, for a period of 90 days after the date
of this Agreement, other than (i) shares of common stock of the Company disposed
of as bona fide gifts approved by ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc., or (ii) a number of
shares of common stock of the Company (not to exceed 10,000 shares) authorized
by the Company to be sold (it being understood that the Company will not
authorize all executive officers and directors to sell more than 100,000 shares
of common stock of the Company in the aggregate during such 90 day period). In
case of (ii) above, the undersigned agrees to sell such shares of common stock
of the Company only to or through ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
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If for any reason the Underwriting Agreement shall be
terminated prior to the Closing Date (as defined in the Underwriting Agreement),
the agreement set forth above shall likewise be terminated.
Yours very truly,
By: ____________________________
Name:
Title: